REPUBLIC ACT NO.
10863, May 30, 2016 (b) Actual or Outright Exportation refers to the customs
AN ACT MODERNIZING THE CUSTOMS AND TARIFF
ADMINISTRATION
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress
assembled:chanRoblesvirtualLawlibrary
TITLE I
PRELIMINARY PROVISIONS
CHAPTER 1
SHORT TITLE
SECTION 100. Short Title. — This Act shall be known as
the "Customs Modernization and Tariff Act (CMTA)".
CHAPTER 2
GENERAL AND COMMON PROVISIONS
Sec. 101. Declaration of Policy. — It is hereby declared the
policy of the State to protect and enhance government
revenue, institute fair and transparent customs and tariff
management that will efficiently facilitate international trade,
prevent and curtail any form of customs fraud and illegal acts,
and modernize customs and tariff administration. Towards this
end, the State shall:ChanRoblesVirtualawlibrary
(a) Develop and implement programs for the continuous
enhancement of customs systems and processes that will
harmonize customs procedures;cralawlawlibrary
(b) Adopt clear and transparent customs rules, regulations,
policies and procedures, consistent with international
standards and customs best practices;cralawlawlibrary
(c) Establish a regime of transparency of and accessibility to
customs information, customs laws, rules, regulations,
administrative policies, procedures and practices, in order to
ensure informed and diligent compliance with customs
practices and procedures by stakeholders;cralawlawlibrary
(d) Consult, coordinate and cooperate with other government
agencies and the private sector in implementing and
developing customs policy;cralawlawlibrary
(e) Provide a fair and expeditious administrative and judicial
appellate remedy for customs related grievances and
matters;cralawlawlibrary
(f) Employ modern practices in customs administration and
utilize information and communications technology in the
implementation of customs functions; and (g) Institute
professionalism and meritocracy in customs tax administration
by attracting and retaining competent and capable customs
officers and personnel to enforce the provisions of this Act.
Sec. 102. Definition of Terms. - As used in this
Act:ChanRoblesVirtualawlibrary
(a) Abatement refers to the reduction or diminution, in whole
or in part, of duties and taxes where payment has not been
made;cralawlawlibrary
procedure applicable to goods which, being in free circulation,
leave the Philippine territory and are intended to remain
permanently outside it;cralawlawlibrary
(c) Admission refers to the act of bringing imported goods
directly or through transit into a free zone;cralawlawlibrary
(d) Airway Bill (AWB) refers to a transport document for
airfreight used by airlines and international freight forwarders
which specify the holder or consignee of the bill who has the
right to claim delivery of the goods when they arrive at the
port of destination. It is a contract of carriage that includes
carrier conditions, such as limits of liability and claims
procedures. In addition, it contains transport instructions to
airlines and carriers, a description of the goods, and applicable
transportation charges;cralawlawlibrary
(e) Appeal refers to the remedy by which a person who is
aggrieved or adversely affected by any action, decision, order,
or omission of the Bureau, seeks redress before the Bureau,
the Secretary of Finance, or competent court, as the case may
be;cralawlawlibrary
(f) Assessment refers to the process of determining the
amount of duties and taxes and other charges due on imported
and exported goods;cralawlawlibrary
(g) Authorized Economic Operator (ABO) refers to the
importer, exporter, customs broker, forwarder, freight
forwarder, transport provider, and any other entity duly
accredited by the Bureau based on the World Customs
Organization (WCO) Framework of Standards to Secure and
Facilitate Global Trade, the Revised Kyoto Convention (RKC),
the WCO Supply Chain Management Guidelines and the various
national best practices to promote trade facilitation and to
provide a seamless movement of goods across borders through
secure international trade supply chains with the use of risk
management and modern technology;cralawlawlibrary
(h) Bill of Lading (B/L) refers to a transport document issued
by shipping lines, carriers and international freight forwarders
or non-vessel operating common carrier for water-borne
freight. The holder or consignee of the bill has the right to
claim delivery of the goods at the port of destination. It is a
contract of carriage that includes earner conditions, such as
limits of liability and claims procedures. In addition, it contains
transport instructions to shipping lines and carriers, a
description of the goods, and applicable transportation
charges;cralawlawlibrary
(i) Bureau refers to the Bureau of Customs;cralawlawlibrary
(j) Carrier refers to the person actually transporting goods or
in charge of or responsible for the operation of the means of
transport such as airlines, shipping lines, freight forwarders,
cargo consolidators, non-vessel operating common carriers and
other international transport operators;cralawlawlibrary
(k) Clearance refers to the completion of customs and other
government formalities necessary to allow goods to enter for
consumption, warehousing, transit or transshipment, or to be
exported or placed under another customs
procedure;cralawlawlibrary
(l) Commission refers to the Tariff
Commission;cralawlawlibrary
(m) Conditional Importation refers to the customs procedure
known under the RKC as temporary admission in which certain
goods can be brought into a customs territory conditionally
relieved, totally or partially, from payment of import duties and
taxes; such goods must be imported for a specific purpose and
must be intended for reexportation within a specified period
and without having undergone any substantial change except
due to normal depreciation;cralawlawlibrary
(n) Customs Broker refers to any person who is a bona
fide holder of a valid Certificate of Registration/Professional
Identification Card issued by the Professional Regulatory Board
and Professional Regulation Commission pursuant to Republic
Act No. 9280, as amended, otherwise known as the "Customs
Brokers Act of 2004";cralawlawlibrary
(o) Customs Office refers to any customs administrative unit
that is competent and authorized to perform all or any of the
functions enumerated under customs and tariff
laws;cralawlawlibrary
(p) Customs Officer, as distinguished from a clerk or
employee, refers to a person whose duty, not being clerical or
manual in nature, involves the exercise of discretion in
performing the function of the Bureau. It may also refer to an
employee authorized to perform a specific function of the
Bureau as provided in this Act;cralawlawlibrary
(q) Customs Territory refers to areas in the Philippines where
customs and tariff laws may be enforced;cralawlawlibrary
(r) Entry refers to the act, documentation and process of
bringing imported goods into the customs territory, including
goods coming from free zones;cralawlawlibrary
(s) Exportation refers to the act, documentation, and process
of bringing goods out of Philippine territory;cralawlawlibrary
(t) Export Declaration refers to a statement made in the
manner prescribed by the Bureau and other appropriate
agencies, by which the persons concerned indicate the
procedure to be observed for taking out or causing to be taken
out any exported goods and the particulars of which the
customs administration shall require;cralawlawlibrary
(u) Flexible Clause refer to the power of the President upon
recommendation of the National Economic and Development
Authority (NEDA): (1) to increase, reduce or remove existing
protective tariff rates of import duty, but in no case shall be
higher than one hundred percent (100%) ad valorem; (2) to
establish import quota or to ban importation of any commodity
as may be necessary; and (3) to impose additional duty on all
import not exceeding ten percent (10%) ad valorem, whenever
necessary;cralawlawlibrary
(v) Foreign Exporter refers to one whose name appears on
documentation attesting to the export of the product to the
Philippines regardless of the manufacturer's name in the
invoice;cralawlawlibrary
(w) Free Zone refers to special economic zones registered with
the Philippine Economic Zone Authority (PEZA) under Republic
Act No. 7916, as amended, duly chartered or legislated special
economic zones and freeports such as Clark Freeport Zone;
Poro Point Freeport Zone; John Hay Special Economic Zone
and Subic Bay Freeport Zone under Republic Act No. 7227, as
amended by Republic Act No. 9400; the Aurora Special
Economic Zone under Republic Act No. 9490, as amended; the
Cagayan Special Economic Zone and Freeport under Republic
Act No. 7922; the Zamboanga City Special Economic Zone
under Republic Act No. 7903; the Freeport Area of Bataan
under Republic Act No. 9728; and such other freeports as
established or may be created by law;cralawlawlibrary
(x) Goods refer to articles, wares, merchandise and any other
items which are subject of importation or
exportation;cralawlawlibrary
(y) Goods Declaration refers to a statement made in the
manner prescribed by the Bureau and other appropriate
agencies, by which the persons concerned indicate the
procedure to be observed in the application for the entry or
admission of imported goods and the particulars of which the
customs administration shall require;cralawlawlibrary
(z) Importation refers to the act of bringing in of goods from a
foreign territory into Philippine territory, whether for
consumption, warehousing, or admission as defined in this
Act;cralawlawlibrary
(aa) Freight Forwarder refers to a local entity that acts as a
cargo intermediary and facilitates transport of goods on behalf
of its client without assuming the role of a carrier, which can
also perform other forwarding services, such as booking cargo
space, negotiating freight rates, preparing documents,
advancing freight payments, providing packing/crating,
trucking and warehousing, engaging as an
agent/representative of a foreign non-vessel operating as a
common carrier/cargo consolidator named in a master bill of
lading as consignee of a consolidated shipment, and other
related undertakings;cralawlawlibrary
(bb) International Freight Forwarder refers to persons
responsible for the assembly and consolidation of shipments
into single lot, and assuming, in most cases, the full
responsibility for the international transport of such shipment
from point of receipt to the point of
destination;cralawlawlibrary
(cc) Jurisdictional Control refers to the power and rights of the
Bureau in exercising supervision and police authority over all
seas within the jurisdiction of the Philippine territory and over
all coasts, ports, airports, harbors, bays, rivers and inland
waters whether navigable or not from the sea;cralawlawlibrary
(dd) Lodgement refers to the registration, of a goods
declaration with the Bureau; r (ee) Non-Vessel Operating
Common Carrier (NVOCC) refers to an entity, which may or
may not own or operate a vessel that provides a point-to-point
service which may include several modes of transport and/or
undertakes group age of less container load (LCL) shipments
and issues the corresponding transport
document;cralawlawlibrary
(ff) Outright Smuggling refers to an act of importing goods into
the country without complete customs prescribed importation
documents, or without being cleared by customs or other
regulatory government agencies, for the purpose of evading
payment of prescribed taxes, duties and other government
charges;cralawlawlibrary
(gg) Perishable Good refers to goods liable to perish or goods
that depreciate greatly in value while stored or which cannot
be kept without great disproportionate expense, which may be
proceeded to, advertised and sold at auction upon notice if
deemed reasonable;cralawlawlibrary
(hh) Port of Entry refers to a domestic port open to both
domestic and international trade, including principal ports of
entry and subports of entry. A principal port of entry is the
chief port of entry of the Customs District wherein it is situated
and is the permanent station of the District Collector of such
port. Subports of entry are under the administrative
jurisdiction of the District Collector of the principal port of
entry of the Customs District. Port of entry as used in this Act
shall include airport of entry;cralawlawlibrary
(ii) Port of Discharge, also called Port of Unloading, refers to a
place where a vessel, ship, aircraft or train unloads its
shipments, from where they will be dispatched to their
respective consignees;cralawlawlibrary
(jj) Reexportation means exportation of goods which have
been imported;cralawlawlibrary
(kk) Release of Goods refers to the action by the Bureau to
permit goods undergoing clearance to be placed at the disposal
of the party concerned;cralawlawlibrary
(ll) Refund refers to the return, in whole or in part, of duties
and taxes paid on goods;cralawlawlibrary
(mm) Security refers to any form of guaranty, such as a surety
bond, cash bond, standby letter of credit or irrevocable letter
of credit, which ensures the satisfaction of an obligation to the
Bureau;cralawlawlibrary
(nn) Smuggling refers to the fraudulent act of importing any
goods into the Philippines, or the act of assisting in receiving,
concealing, buying, selling, disposing or transporting such
goods, with full knowledge that the same has been
fraudulently imported, or the fraudulent exportation of goods.
Goods referred to under this definition shall be known as
smuggled goods;cralawlawlibrary
(oo) Taxes refer to all taxes, fees and charges imposed under
this Act and the National Internal Revenue Code (NIRC) of
1997, as amended, and collected by the
Bureau;cralawlawlibrary
(pp) Technical Smuggling refers to the act of importing goods
into the country by means of fraudulent, falsified or erroneous
declaration of the goods to its nature, kind, quality, quantity or
weight, for the purpose of reducing or avoiding payment of
prescribed taxes, duties and other charges;cralawlawlibrary
(qq) Tentative Release refers to a case where the assessment
is disputed and pending review, an importer may put up a cash
bond equivalent to the duties and taxes due on goods before
the importer can obtain the release of said
goods;cralawlawlibrary
(rr) Transit refers to the customs procedure under which
goods, in its original form, are transported under customs
control from one customs office to another, or to a free
zone;cralawlawlibrary
(ss) Transshipment refers to the customs procedure under
which goods are transferred under customs control from the
importing means of transport to the exporting means of
transport within the area of one customs office, which is the
office of both importation and exportation;cralawlawlibrary
(tt) Traveler refers to any person who temporarily enters the
territory of a country in which he or she does not normally
resides (non-resident), or who leaves that territory, and any
person who leaves the territory of a country in which he or she
normally resides (departing resident) or who returns to that
territory (returning resident); and
(uu) Third Party refers to any person who deals directly with
the Bureau, for and on behalf of another person, relating to
the importation, exportation, movement or storage of goods.
Sec. 103. When Importation Begins and Deemed
Terminated. – Importation begins when the carrying vessel or
aircraft enters the Philippine territory with the intention to
unload therein. Importation is deemed terminated
when:ChanRoblesVirtualawlibrary
(a) The duties, taxes and other charges due upon the goods
have been paid or secured to be paid, at the port of entry
unless the goods are free from duties, taxes and other charges
and legal permit for withdrawal has been granted: or
(b) In case the goods are deemed free of duties, taxes and
other charges, the goods have legally left the jurisdiction of
the Bureau.
Sec. 104. When Duty and Tax are Due on Imported Goods. –
Except as otherwise provided for in this Act or in other laws, all
goods, when imported into the Philippines, shall be subject to
duty upon importation, including goods previously exported
from the Philippines.
Unpaid duties, taxes and other charges, shall incur legal
interest of twenty percent (20%) per annum computed from
the date of final assessment under Section 429 of this Act,
when payment becomes due and demandable. The legal
interest shall likewise accrue on any fine or penalty imposed.
Upon payment of the duties, taxes and other charges, the
Bureau shall issue the necessary receipt or document as proof
of such payment.
Sec. 105. Effective Date of Rate of Import Duty. – Imported
goods shall be subject to the import duty rates under the
applicable tariff heading that are effective at the date of
importation or upon withdrawal from the warehouse for
consumption. In case of withdrawal from free zones for
introduction to the customs territory, the duty rate at the time
of withdrawal shall be applicable on the goods originally
admitted, whether withdrawn in its original or advanced form.
In case of goods sold at customs public auction, the duty rates
at the date of the auction, shall apply for purposes of
implementing Section 1143(a) of this Act.
Sec. 106. Declarant. – A declarant may be a consignee or a
person who has the right to dispose of the goods. The
declarant shall lodge a goods declaration with the Bureau and
may be:ChanRoblesVirtualawlibrary
(a) The importer, being the holder of the bill of lading; or
(b) The exporter, being the owner of the goods to be shipped
out; or
(c) A customs broker acting under the authority of the
importer or from a holder of the bill; or
(d) A person duly empowered to act as agent or attorney-in-
fact for each holder.
In case the consignee or the person who has the right to
dispose of the goods is a juridical person, it may authorize a
responsible officer of the company to sign the goods
declaration as declarant on its behalf.
The goods declaration submitted to the Bureau shall be
processed by the declarant or by a licensed customs
broker: Provided, That for importations, a transition period of
two (2) years from the effectivity of this Act is hereby provided
during which subparagraph (d) of this section shall not be
implemented by the Bureau: Provided, further, That after two
(2) years from the effectivity of this Act, subparagraph (d) of
this section shall take into effect consistent with international
standards and customs best practices.
Sec. 107. Rights and Responsibilities of the Declarant. – The
declarant shall be responsible for the accuracy of the goods
declaration and for the payment of all duties, taxes and other
charges due on the imported goods. The licensed customs
broker shall likewise be responsible for the accuracy of the
goods declaration but shall not be responsible for the payment
of duties, taxes and other charges due on the imported goods.
The declarant shall sign the goods declaration, even when
assisted by a licensed customs broker, who shall likewise sign
the goods declaration.
Sec. 108. Penalties for Errors in Goods Declaration. – The
Bureau shall not impose substantial penalties for errors when
such errors are inadvertent and there was no fraudulent intent
or gross negligence in the commission thereof: Provided, That
in order to discourage repetition of such errors, a penalty may
be imposed but shall not be excessive.
Sec. 109. Application of Information and Communications
Technology. – In accordance with international standards, the
Bureau shall utilize information and communications
technology to enhance customs control and to support a cost-
effective and efficient customs operations geared towards a
paperless customs environment.
The Bureau shall communicate, exchange and process trade-
and logistics-related information in the national and regional
level for the efficient and prompt clearance of goods and
commodities in a technology-neutral and secured
infrastructure for business, industries, and government.
The security of data and communication shall be in a manner
that is consistent with applicable local and internationally
accepted standards on information security.
The Bureau shall likewise include as part of its systems and
processes, a disaster preparedness and recovery plan to
ensure business continuity by maintaining its uptime goal for
its electronic and online services.
For purposes of customs procedures, electronic documents,
permits, licenses or certificates shall be acceptable and shall
have the legal effect, validity or enforceability as any other
document or legal writing: Provided, That when the prescribed
requirements are duly complied with, the Bureau
shall:ChanRoblesVirtualawlibrary
(a) Recognize the authenticity and reliability of electronic
documents;cralawlawlibrary
(b) Transmit approval in the form of electronic data messages
or electronic documents; and
(c) Require and/or accept payments and issue receipts
acknowledging such payments through systems using
electronic data messages or electronic documents.
The introduction and implementation of information and
communications technology shall be undertaken with due
consultation with directly affected parties and stakeholders.
Sec. 110. Relationship Between the Bureau and Third
Parties. – Parties may transact business with the Bureau either
directly or through a designated third party to act on their
behalf.
The customs transactions directly transacted by a party shall
not be treated less favorably or be subject to more stringent
requirements than those transacted through a designated third
party.
A designated third party shall have the same rights and
obligations as the designating party when transacting business
with the Bureau.
Subject to the provisions of existing laws, treaties, convention
and international agreements, the Secretary of Finance shall
make the necessary guidelines for the defined relationship of
the Bureau and third parties.
Sec. 111. Information of General Application. – All laws,
decisions, rulings, circulars, memoranda and orders of the
Bureau shall be published in accordance with law.
To foster an informed compliance regime, the Bureau shall
ensure that all relevant and available information of general
application pertaining to customs operations and procedures
which are not confidential or intended for the Bureau's internal
use only, shall be readily accessible to any interested person.
Any new information, amendment or changes in customs law,
administrative procedures or requirements, shall, as far as
practicable, be made readily available prior to its effective date
of implementation unless advance notice is precluded.
Sec. 112. Information of a Specific Nature. – The Bureau shall
provide information, not otherwise confidential or for the
Bureau's internal use only, relating to a specific matter as may
be requested by an interested party for legitimate use.
The Bureau may require the payment of a reasonable fee in
providing such information. The requested information shall be
release d within reasonable time from the filing of the request
and payment of the required fee.
Sec. 113. Decision and Ruling. – The Bureau shall, consistent
with Section 1502 of this Act, issue binding and advance
decision and ruling at the request of an interested party on
matters pertaining to importation or exportation of goods.
Upon written request of the interested party, the Bureau shall
notify the party of its decision in writing within the period
specified in this Act or by regulation. Should the decision be
adverse to the requesting interested party, the reasons thereof
shall be indicated and the party shall be advised of the party's
right of appeal.
The ruling and decision shall be issued by the Bureau within
thirty (30) days from the submission of the necessary
documents and information.
Sec. 114. Right of Appeal, Forms and Ground. – Any party
adversely affected by a decision or omission of the Bureau
pertaining to an importation, exportation, or any other legal
claim shall have the right to appeal within fifteen (15) days
from receipt of the questioned decision or order.
An appeal in writing shall be filed within the period prescribed
in this Act or by regulation and shall specify the grounds
thereof.
The Bureau may allow a reasonable time for the submission of
supporting evidence to the appeal.
CHAPTER 3
TYPES OF IMPORTATION

Sec. 115. Treatment of Importation. – Imported goods shall be
deemed "entered" in the Philippines for consumption when the
goods declaration is electronically lodged, together with any
required supporting documents, with the pertinent customs
office.
Sec. 116. Free Importation and Exportation. – Unless
otherwise provided by law or regulation, all goods may be
freely imported into and exported from the Philippines without
need for import and export permits, clearances or licenses.
Sec. 117. Regulated Importation and Exportation. – Goods
which are subject to regulation shall be imported or exported
only after securing the necessary goods declaration or export
declaration, clearances, licenses, and any other requirements,
prior to importation or exportation. In case of importation,
submission of requirements after arrival of the goods but prior
to release from customs custody shall be allowed but only in
cases provided for by governing laws or regulations.
Sec. 118. Prohibited Importation and Exportation. – The
importation and exportation of the following goods are
prohibited:ChanRoblesVirtualawlibrary
(a) Written or printed goods in any form containing any matter
advocating or inciting treason, rebellion, insurrection, sedition
against the government of the Philippines, or forcible
resistance to any law of the Philippines, or written or printed
goods containing any threat to take the life of, or inflict bodily
harm up on any person in the Philippines;cralawlawlibrary
(b) Goods, instruments, drugs and substances designed,
intended or adapted for producing unlawful abortion, or any
printed matter which advertises, describes or gives direct or
indirect information where, how or by whom unlawful abortion
is committed;cralawlawlibrary
(c) Written or printed goods, negatives or cinematographic
films, photographs, engravings, lithographs, objects, paintings,
drawings or other representation of an obscene or immoral
character;cralawlawlibrary
(d) Any goods manufactured in whole or in part of gold, silver
or other precious metals or alloys and the stamp, brand or
mark does not indicate the actual fineness of quality of the
metals or alloys;cralawlawlibrary
(e) Any adulterated or misbranded food or goods for human
consumption or any adulterated or misbranded drug in
violation of relevant laws and regulations;cralawlawlibrary
(f) Infringing goods as defined under the Intellectual Property
Code and related laws; and
(g) All otter goods or parts thereof which importation and
exportation are explicitly prohibited by law or rules and
regulations issued by the competent authority.
Sec. 119. Restricted Importation and Exportation. – Except
when authorized by law or regulation, the importation and
exportation of the following restricted goods are
prohibited:ChanRoblesVirtualawlibrary
(a) Dynamite, gunpowder, ammunitions and other explosives,
firearms and weapons of war, or parts thereof;cralawlawlibrary
(b) Roulette wheels, gambling outfits, loaded dice, marked
cards, machines, apparatus or mechanical devices used in
gambling or the distribution of money, cigars, cigarettes or
other goods when such distribution is dependent on chance,
including jackpot and pinball machines or similar contrivances,
or parts thereof; (c) Lottery and sweepstakes tickets, except
advertisements thereof and lists of drawings
therein;cralawlawlibrary
(d) Marijuana, opium, poppies, coca leaves, heroin or other
narcotics or synthetic drugs which are or may hereafter be
declared habit forming by the President of the Philippines, or
any compound, manufactured salt, derivative, or preparation
thereof, except when imported by the government of the
Philippines or any person duly authorized by the Dangerous
Drugs Board, for medicinal purposes;cralawlawlibrary
(e) Opium pipes or parts thereof, of whatever material; and
(f) Any other goods whose importation and exportation are
restricted.
The restriction to import or export the above stated goods
shall include the restriction on their transit.
CHAPTER 4
RELIEF CONSIGNMENT
Sec. 120. Relief Consignment. – Goods such as food, medicine,
equipment and materials for shelter, donated or leased to
government institutions and accredited private entities for free
distribution to or use of victims of calamities shall be treated
and entered as relief consignment.
Upon declaration of a state of calamity, clearance of relief
consignment shall be a matter of priority and subject to a
simplified customs procedure. The Bureau shall provide
for:ChanRoblesVirtualawlibrary
(a) Lodging of a simplified goods declaration or of a provisional
or incomplete goods declaration subject to completion of the
declaration within a specified period;cralawlawlibrary
(b) Lodging, registering and checking of the goods declaration
and supporting documents prior to the arrival of the goods,
and their release upon arrival;cralawlawlibrary
(c) Clearance beyond the designated hours of business or
away from customs offices and waiver of any corresponding
charges; and
(d) Examination and/or sampling of goods only in exceptional
circumstances.
The Department of Finance (DOF) and the Department of
Social Welfare and Development (DSWD) shall jointly issue the
rules and regulations for the implementation of tins provision.
Sec. 121. Duty and Tax Treatment. – Relief consignment, as
defined in Section 120, imported during a state of calamity and
intended for a specific calamity area for the use of the calamity
victims therein, shall be exempt from duties and taxes.
TITLE II
BUREAU OF CUSTOMS
CHAPTER 1
GENERAL ADMINISTRATION
Sec. 200. Chief Officials of the Bureau. – The Bureau shall be
headed by a Commissioner and shall be assisted by at least
four (4) but not more than six (6) Deputy Commissioners.
The Commissioner shall be appointed by the President of the
Philippines.
The Deputy Commissioners shall also be appointed by the
President and at least majority of whom shall come from the
ranks of the Bureau.
Sec. 201. Powers and Functions of the Commissioner. – The
Commissioner shall have the following powers and
functions:ChanRoblesVirtualawlibrary
(a) Exclusive and original jurisdiction, to interpret the
provisions of this Act, in collaboration with other relevant
government agencies, subject to review by the Secretary of
Finance;cralawlawlibrary
(b) Exercise any customs power, duties and functions, directly
or indirectly;cralawlawlibrary
(c) Review any action or decision of any customs officer
performed pursuant to the provisions of this
Act;cralawlawlibrary
(d) Review and decide disputed assessments and other
matters related thereto, subject to review by the Secretary of
Finance and exclusive appellate jurisdiction of the Court of Tax
Appeals (CTA);cralawlawlibrary
(e) Delegate the powers vested under this Act to any customs
officer with the rank equivalent to division chief or higher,
except for the following powers and
functions:ChanRoblesVirtualawlibrary
(1) Promulgation of rules and regulations;cralawlawlibrary
(2) Issuance, revocation or modification of rulings; and
(3) Compromise or abate of customs obligations.
(f) Assignment or reassignment of any customs officer subject
to the approval of the Secretary of Finance: Provided, That
District Collectors and other customs officers that perform
assessment functions shall not remain in the same area of
assignment for more than three (3) years; and
(g) Perform all other duties and functions as may be necessary
for the effective implementation of this Act and other customs
related laws.
Sec. 202. Functions of the Bureau. – The Bureau shall exercise
the following duties and functions:ChanRoblesVirtualawlibrary
(a) Assessment and collection of customs revenues from
imported goods and other dues, fees, charges, fines and
penalties accruing under this Act;cralawlawlibrary
(b) Simplification and harmonization of customs procedures to
facilitate movement of goods in international
trade;cralawlawlibrary
(c) Border control to prevent entry of smuggled
goods;cralawlawlibrary
(d) Prevention and suppression of smuggling and other
customs fraud;cralawlawlibrary
(e) Facilitation and security of international trade and
commerce through an informed compliance program
(f) Supervision and control over the entrance and clearance of
vessels and aircraft engaged in foreign
commerce;cralawlawlibrary
(g) Supervision and control over the handling of foreign mails
arriving in the Philippines for the purpose of collecting
revenues and preventing the entry of
contraband;cralawlawlibrary
(h) Supervision and control on all import and export cargoes,
landed or stored in piers, airports, terminal facilities, including
container yards and freight stations for the protection of
government revenue and prevention of entry of
contraband;cralawlawlibrary
(i) Conduct a compensation study with the end view of
developing and recommending to the President a competitive
compensation and remuneration system to attract and retain
highly qualified personnel, while ensuring that the Bureau
remains financially sound and sustainable;cralawlawlibrary
(j) Exercise of exclusive original jurisdiction over forfeiture
cases under this Act; and
(k) Enforcement of this Act and all other laws, rules and
regulations related to customs administration.
Sec. 203. Annual Report of the Commissioner. – The
Commissioner shall submit to the President, the Congress of
the Philippines and the NEDA an annual report on the
performance of the Bureau, on or before March 31 of the
following year.
Sec. 204. Promulgation of Rules and Regulations. – The
Commissioner, subject to the approval of the Secretary of
Finance, shall promulgate rules and regulations for the
enforcement of this Act. The Commissioner shall regularly
prepare and publish an updated customs manual, and the
rules, regulations and decisions of the Bureau. The
Commissioner shall furnish the Congress of the Philippines, the
NEDA and the Tariff Commission with electronic copies of
department orders, administrative orders, circulars, and rules
and regulations promulgated pursuant to this Act.
Sec. 205. Copies of Goods Declaration. – The Commissioner
shall regularly furnish the NEDA, the Philippine Statistics
Authority (PSA), the Bureau of Internal Revenue (BIR.) and
the Tariff Commission electronic copies of all customs goods
declaration processed and cleared by the Bureau.
Upon request, the Tariff Commission shall have access to, and
the right to be furnished with copies of liquidated goods
declaration and other documents supporting the goods
declaration as finally filed in the Commission on Audit (COA).
For this purpose, the Bureau shall maintain electronic records
of goods declaration and other documents supporting the
declaration.
CHAPTER 2
CUSTOMS DISTRICTS AND PORTS OF ENTRY
Sec. 206. Customs Districts. – For administrative purposes, the
Philippines shall be divided into as many Customs Districts as
necessary, the respective limits of which may be changed from
time to time by the Commissioner, with the approval of the
Secretary of Finance.
Each Customs District shall be supervised by one (1) District
Collector, assisted by as many Deputy District Collectors as
may be necessary. The choice of the location of a District
Office, its business hours and the staffing pattern thereof, shall
be based on the particular requirements of each district.
Sec. 207. Ports of Entry. – All ports of entry shall be under the
supervision and control of a Customs District. A District
Collector shall be assigned in the principal ports of entry while
a Deputy District Collector may be assigned to other types of
ports of entry.
The principal ports of entry shall be located in Aparri, San
Fernando, Manila, Manila International Container Port, Ninoy
Aquino International Airport, Subic, Clark, Batangas, Legaspi,
Iloilo, Cebu, Tacloban, Surigao, Cagayan de Oro, Zamboanga,
Davao, Limay and such other ports that may be created
pursuant to this Act.
For the effective enforcement of the Bureau's functions and
without hampering business and commercial operations of the
ports, sea ports and airport authorities and private ports and
airport operators shall provide suitable areas for examination
and for other customs equipment free of charge within, a
definite period of time, as agreed with private port and airport
operations, if any.
Sec. 208. Power of the President to Open and Close Any
Port. – Upon the recommendation of the Secretary of Finance,
the President may open or close any port of entry. Upon
closure of a port of entry, the existing personnel shall he
reassigned by the Commissioner, subject to the approval of
the Secretary of Finance,
Sec. 209. Assignment of Customs Officers and Employees to
Other Duties. – The Commissioner, with the approval of the
Secretary of Finance, may assign any employee of the Bureau
to any port, service, division or office of the Bureau within the
Bureau's staffing pattern or organizational structure, or may
assign any employee other duties: Provided, That such
assignment shall not affect the employee's tenure of office nor
result in a change of status, demotion in rank and/or salary
deduction.
Sec. 210. Duties of the District Collector. – The District
Collector shall have the following duties in their assigned
Customs District:ChanRoblesVirtualawlibrary
(1) Ensure entry of all imported goods at the customs
office;cralawlawlibrary
(2) Prevent importation and exportation of prohibited
goods;cralawlawlibrary
(3) Ensure legal compliance of regulated goods and facilitate
the flow of legitimate trade;cralawlawlibrary
(4) Examine, classify and value imported
goods;cralawlawlibrary
(5) Assess and collect duties, taxes and other charges on
imported goods;cralawlawlibrary
(6) Hold and dispose imported goods in accordance with this
Act;cralawlawlibrary
(7) Prevent smuggling and other customs fraud; and
(8) Perform other necessary duties that may be assigned by
the Commissioner for the effective implementation of this Act.
Subject to the supervision and control of the District Collector,
the duties and functions of the District Collector may be
delegated to the Deputy District Collector. The Deputy District
Collector assigned to a sub-port shall be under the supervision
and control of the District Collector of the corresponding
principal port.
Sec. 211. Temporary Succession of Deputy District Collector to
Position of Acting District Collector. – In the absence or
disability of a District Collector or, in case of vacancy, the
Deputy District Collector shall temporarily discharge the duties
of the District Collector. Should there be no Deputy District
Collector, the District Collector shall designate, in writing, a
senior ranking customs officer to temporarily perform the
duties of the District Collector. In case there are two (2) or
more senior ranking customs officers with equal length of
service, a drawing of lots shall be undertaken. The District
Collector shall report the designation to the Commissioner
within twenty-four (24) hours after the designation.
Sec. 212. Records to be Kept by Customs Officers. – District
Collectors, Deputy District Collectors, and customs officers
acting in such capacities must maintain permanent records of
official transactions and turn-over all records and official
papers to their respective successors or other authorized
officials. The records shall be made available for inspection by
other authorized officials of the Bureau.
If required, the District Collector shall affix the official dry seal
of the Bureau on all documents and records requiring
authentication.
Sec. 213. Reports of the District Collector to the
Commissioner. – The District Collector shall report to the
Commissioner any probable or initiated litigation within the
Customs District and shall submit regular monthly reports on
all district transactions.
CHAPTER 3
EXERCISE OP POLICE AUTHORITY
SBC. 214. Persons Exercising Police Authority. – For the
effective implementation of this Act, the following persons are
authorized to effect search, seizure, and
arrest:ChanRoblesVirtualawlibrary
(a) Officials of the Bureau, District Collectors, Deputy District
Collectors, police officers, agents, inspectors and guards of the
Bureau;cralawlawlibrary
(b) Upon authorization of the Commissioner, officers and
members of the Armed Forces of the Philippines (AFP) and
national law enforcement agencies; and
(c) Officials of the BIR on all cases falling within the regular
performance of their duties, when payment of internal revenue
taxes is involved.
All officers authorized by the Commissioner to exercise police
authority shall at all times coordinate with the Commissioner.
Goods seized by deputized officers pursuant to this section
shall be physically turned-over immediately to the Bureau,
unless provided under existing laws, rules and regulations.
For this purpose, mission orders shall clearly indicate the
specific name carrying out the mission and the tasks to be
carried out.
Subject to the approval of the Secretary of Finance, the
Commissioner shah1 define the scope, areas covered,
procedures and conditions governing the exercise of such
police authority including custody and responsibility for the
seized goods. The rules and regulations to this effect shall be
furnished to the concerned government agencies and
personnel for guidance and compliance.
All seizures pursuant to this section must be effected in
accordance with the provisions on the conduct of seizure
proceedings provided for in Chapters 3 and 4 of Title XI of this
Act.
Sec. 215. Place Where Authority May be Exercised. – All
persons exercising police authority as described in the
preceding section shall, only exercise powers within customs
premises as provided for in Section 303 of this Act, and within
the limits of the authority granted by the Commissioner.
Port and airport authorities in all ports of entry shall provide
authorized customs officers with unhampered access to all
premises within their administrative jurisdiction.
Sec. 216. Exercise of Power of Seizure. – Any person
exercising police authority under this Act has the power and
duty to seize any vessel, aircraft, cargo, goods, animal or any
other movable property when the same is subject to forfeiture
or when they are subject of a fine imposed under this Act.
Sec. 217. Duty of Officer to Disclose Official Character. – For
the proper exercise of police authority, any authorized person
shall disclose the nature of the authority upon being
questioned at the time of exercise thereof and shall exhibit the
corresponding written authority issued by the Commissioner.
Sec. 218. Authority to Require Assistance and Information. –
Any person exercising police authority may demand the
assistance of and request information from the Philippine
National Police (PNP), the AFP and other national law
enforcement agencies, when necessary, to effect any search,
seizure or arrest. It shall be the duty of any police officer and
other national law enforcers to give such lawful assistance.
Sec. 219. Authority to Enter Properties. – Any person
exercising police authority may, at any time, enter, pass
through, and search any land, enclosure, warehouse, store,
building or structure not principally used as a dwelling house.
When a security personnel or any other employee lives in the
warehouse, store, or any building, structure or enclosure that
is used for storage of goods, it shall not be considered as a
dwelling house for purposes of this Act.
Sec. 220. Authority to Search Dwelling House. – A dwelling
house may be entered and searched only upon warrant issued
by a Judge of a competent court, the sworn application
thereon showing probable cause and particularly describing the
place to be searched and the goods to be seized.
Sec. 221. Authority to Search Vessels or Aircrafts and Persons
or Goods Conveyed Therein. – Any person exercising police
authority under this Act may board, inspect, search and
examine a vessel or aircraft and any container, trunk,
package, box or envelope found on board, and physically
search and examine any person thereon. In case of any
probable violation of this Act, the person exercising police
authority may seize the goods, vessel, aircraft, or any part
thereof.
Such power to search includes removal of any false bottom,
partition, bulkhead, or any other obstruction for the purpose of
uncovering any concealed dutiable or forfeitable goods.
The proceeding herein authorized shall not give rise to any
claim for damage caused to the goods, vessel or aircraft,
unless there is gross negligence or abuse of authority in the
exercise thereof.
Sec. 222. Authority to Search Vehicles, Other Carriers, Persons
and Animals. – Upon reasonable cause, any person exercising
police authority may open and examine any box, trunk,
envelope, or other container for purposes of determining the
presence of dutiable or prohibited goods. This authority
includes the search of receptacles used for the transport of
human remains and dead animals. Such authority likewise
includes the power to stop, search, and examine any vehicle or
carrier, person or animal suspected of holding or conveying
dutiable or prohibited goods.
Sec. 223. Authority to Search Persons Arriving From Foreign
Countries. – Upon reasonable cause, travelers arriving from
foreign countries may be subjected to search and detention by
the customs officers. The dignity of the person under search
and detention shall be respected at all times. Female
inspectors may be employed for the examination and search of
persons of their own sex.
Sec. 224. Power to Inspect and Visit. – The Commissioner or
any customs officer who is authorized in writing by the
Commissioner, may demand evidence of payment of duties
and taxes on imported goods openly for sale or kept in
storage. In the event that the interested party fails to produce
such evidence within fifteen (15) days, the goods may be
seized and subjected to forfeiture proceedings: Provided, That
during the proceedings, the interested party shall be given the
opportunity to prove or show the source of the goods and the
payment of duties and taxes thereon: Provided, further, That
when the warrant of seizure has been issued but subsequent
documents presented evidencing proper payment are found to
be authentic and in order, the District Collector shall, within
fifteen (15) days from the receipt of the motion to quash or
recall the warrant, cause the immediate release of the goods
seized, subject to clearance by the Commissioner: Provided,
finally, That the release thereof shall not be contrary to law.
TITLE III
CUSTOMS JURISDICTION AND CUSTOMS CONTROL
CHAPTER 1
CUSTOMS JURISDICTION
Sec. 300. Customs Jurisdiction. – For the effective
implementation of this Act, the Bureau shall exercise
jurisdiction over all seas within Philippine territory and all
coasts, ports, airports, harbors, bays, rivers and inland waters
whether navigable or not from the sea and any means of
conveyance.
The Bureau shall pursue imported goods subject to seizure
during its transport by land, water and air and shall exercise
jurisdiction as may be necessary for the effective enforcement
of this Act. When a vessel or aircraft becomes subject to
seizure for violation of this Act, a pursuit of such vessel or
aircraft which began within the territorial waters or air space
may continue beyond the same, and the vessel or aircraft may
be seized in the high seas or international air space.
 CHAPTER 2
CUSTOMS CONTROL
Sec. 301. Customs Control Over Goods. – All goods, including
means of transport, entering or leaving the customs territory,
regardless of whether they are liable to duties and taxes, shall
be subject to customs control to ensure compliance with this
Act.
In the application of customs control, the Bureau shall employ
audit-based controls and risk management systems, use
automation to the fullest extent possible, and adopt a
compliance measurement strategy to support risk
management.
The Bureau shall seek to cooperate and conclude mutual
administrative assistance agreements with other customs
administrations to enhance customs control. The Bureau shall
consult, coordinate, and cooperate with other government
regulatory agencies, free zones authorities, and the customs
stakeholders, in general, to enhance customs control.
Sec. 302. Enforcement of Port Regulation of the Bureau of
Quarantine. – Customs officials and employees shall cooperate
with the quarantine authorities in the enforcement of the port
quarantine regulations promulgated by the Bureau of
Quarantine and shall give effect to the same insofar as
connected with matters of shipping and navigation.
Sec. 303. Control Over Premises Used for Customs Purposes. –
The Bureau shall, for customs purposes, have exclusive
control, direction and management of customs offices,
facilities, warehouses, ports, airports, wharves, infrastructure
and other premises in the Customs Districts, in all cases
without prejudice to the general police powers of the local
government units (LGUs), the Philippine Coast Guard and of
law enforcement agencies in the exercise of their respective
functions.
Sec. 304. Power of the President to Subject Premises to
Customs Jurisdiction. – When public interest requires, the
President may, by executive order, declare any public wharf,
landing place, infrastructure, street or land, in any port of
entry under the jurisdiction of the Bureau as may be
necessary, for customs purposes and/or to authorize a port or
terminal operator to transfer overstaying cargoes in an inland
depot or terminal.
Sec. 305. Trespass or Obstruction of Customs Premises. – No
person shall enter or obstruct a customs office, warehouse,
port, airport, wharf, or other premises under the control of
the Bureau without prior authority, including the streets or
alleys where these faculties are located.
Sec. 306. Special Surveillance for the Protection of Customs
Revenue and Prevention of Smuggling. – The Bureau shall
conduct surveillance on vessels or aircrafts entering Philippine
territory and on imported goods entering the customs
office: Provided, That the function of the Philippine Coast
Guard to prevent and suppress the illegal entry of these goods,
smuggling and other forms of customs fraud and violations of
maritime law and its proper surveillance of vessels entering
and/or leaving Philippine territory as provided in Republic Act
No. 9993, otherwise known as the "Philippine Coast Guard Law
of 2009", shall continue to be in force
Sec. 307. Temporary Storage of Goods. – Subject to the rules
and regulations to be issued by the Secretary of Finance, the
Commissioner shall establish a system for temporary storage
of imports prior to goods declaration in case of abandoned or
overstaying-goods.
TITLE IV
IMPORT CLEARANCE AND FORMALITIES
CHAPTER 1
GOODS DECLARATION
Sec. 400. Goods to be Imported through Customs Office. – All
goods imported into the Philippines shall be entered through a
customs office at a port of entry, or may be admitted to or
removed from a free zone as defined in this Act, as the case
may be.
Sec. 401. Importations Subject to Goods Declaration. – Unless
otherwise provided for in this Act, all imported goods shall be
subject to the lodgement of a goods declaration. A goods
declaration may be for consumption, for customs bonded
warehousing, for admission, for conditional importation, or for
customs transit.
Sec. 402. Goods Declaration for Consumption. – All goods
declaration for consumption shall be cleared through a formal
entry process except for the following goods which shall be
cleared through an informal entry
process:ChanRoblesVirtualawlibrary
(a) Goods of a commercial nature with Free on Board (FOB) or
Free Carrier At (FCA) value of less than fifty thousand pesos
(P50,000.00). Every three (3) years after the effectivity of this
Act, the Secretary of Finance shall adjust this amount as
provided herein to its present value, using the Consumer Price
Index (CPI) as published by the PSA; and
(b) Personal and household effects or goods, not in commercial
quantity, imported in a passenger's baggage or mail.
The Commissioner may adjust the value of goods of
commercial nature that shall be cleared through an informal
entry process without prejudice to the periodic adjustment
period in subparagraph (a) of this section.
All importations entered through a formal entry process shall
be covered by a letter of credit or any verifiable commercial
document evidencing payment or in cases where there is no
sale for export, by any commercial document indicating the
commercial value of the goods.
Sec. 403. Provisional Goods Declaration. – Where the declarant
does not have all the information or supporting documents
required to complete the goods declaration, the lodging of a
provisional goods declaration may be allowed: Provided, That it
substantially contains the necessary information required by
the Bureau and the declarant undertakes to complete the
information or submit the supporting documents within forty-
five (45) days from the filing of the provisional goods
declaration, which period may be extended by the Bureau for
another forty-five (45) days for valid reasons.
If the Bureau accepts a provisional goods declaration, the duty
treatment of the goods shall not be different from that of
goods with complete declaration. 'I Goods under a provisional
goods declaration may be released upon posting of any
required security equivalent to the amount ascertained to be
the applicable duties and taxes.
Sec. 404. Owner of Imported Goods. – All goods imported into
the Philippines shall be deemed to be the property of the
consignee or the holder of the bill of lading, airway bill or other
equivalent transport document if duly endorsed by the
consignee therein, or, if consigned to order, duly endorsed by
the consignor. The underwriters of abandoned goods and the
salvors of goods saved from wreck at sea, coast, or in any area
of the Philippines, may be regarded as the consignees. Sec.
405. Liability of Importer for Duties and Taxes. – Unless
relieved by laws or regulations, the liability for duties, taxes,
fees, and other charges attached to importation constitutes a
personal debt due and demandable against the importer in
favor of the government and shall be discharged only upon
payment of duties, taxes, fees and other charges. It also
constitutes alien on the imported goods which may be enforced
while such goods are under customs' custody.
SBC. 406. Importations by the Government. – Except those
provided for in Section 800 of this Act, all importations by the
government for its own use or that of its subordinate branches
or instrumentalities, or corporations, agencies or
instrumentalities owned or controlled by the government, shall
be subject to the duties, taxes, fees and other charges under
this Act.
Sec. 407. Goods Declaration and Period of Filing. . – As far as
practicable, the format of the goods declaration shall conform
with international standards. The data required in the goods
declaration shall be limited to such particulars that are deemed
necessary for the assessment and collection of duties and
taxes, the compilation of statistics and compliance with this
Act. The Bureau shall require the electronic lodgement of the
goods declaration.
The Bureau shall only require supporting documents necessary
for customs control to ensure that all requirements of the law
have been complied with. Translation of supporting documents
shall not be required except when necessary.
Goods declaration must be lodged within fifteen (15) days from
the date of discharge of the last package from the vessel or
aircraft. The period to file the goods declaration may, upon
request, be extended on valid grounds for another fifteen (15)
days: Provided, That the request is made before the expiration
of the original period within which to file the goods
declaration: Provided, however, That the period of the
lodgement of the goods declaration maybe adjusted by the
Commissioner.
Sec. 408. Lodgement and Amendment of Goods Declaration. –
The Bureau shall permit the electronic lodgement of the goods
declaration at any designated customs office. The Bureau shall,
for valid reason and under terms and conditions provided by
regulation, permit the declarant to amend the goods
declaration that has already been lodged: Provided, That the
request to amend the goods declaration, together with the
intended amendments, must be received prior to final
assessment or examination of the goods.
Sec. 409. Advance Lodgement and Clearance. – The Bureau
may provide for the lodgement and clearance of goods
declaration and supporting documents prior to the arrival of
the goods under such terms and conditions as may be
provided by rules and regulations to be promulgated under this
Act.
Sec. 410. Entry of Goods in Part for Consumption and in Part
for Warehousing. – Goods declaration covered by one bill of
lading or airway bill over goods which are meant in part for
consumption and in part for warehousing may be both entered
simultaneously for release at the port of entry.
Sec. 411. Contents of Goods Declaration. – Goods declaration
10
shall contain the names of the consignee, importing vessel or
aircraft port of departure, port of destination and date of
arrival, the number and marks of packages, or the quantity, if
in bulk, the nature and correct commodity description of the
goods contained therein, its value as set forth in a proper
invoice, and such other information as may be required by
rules and regulations. Where the declarant does not have all
the information required to make the goods declaration, a
provisional or incomplete goods declaration shall, for certain
cases and for reasons deemed valid by the Bureau, be allowed
to be lodged: Provided, That it contains the particulars deemed
necessary by the Bureau for the acceptance of the entry filed
and that the declarant undertakes to complete it within forty-
five (45) days from the filing of the provisional goods
declaration in accordance with Section 403 of this Act
Sec. 412. Statements to be Provided in the Goods
Declaration. – No entry of imported goods shall be allowed
unless the goods declaration has been lodged with the
Bureau. The goods declaration shall, under penalties of
falsification or perjury, contain the following
statements:ChanRoblesVirtualawlibrary
(a) The invoice and goods declaration contain an accurate and
faithful account of the prices paid or payable for the goods and
other adjustments to the price actually paid or payable, and
that nothing has been omitted therefrom or concealed whereby
the government of the Republic of the Philippines might be
defrauded of any part of the duties and taxes lawfully due on
the goods; and
(b) To the best of the declarant's information and belief, all the
invoices and bills of lading or airway bills relating to the goods
are the only ones in existence relating to the importation in
question, and that these documents are in the same state as
when they were received by the declarant, and the declaration
thereon are in all respects genuine and true.
Goods declaration shall be submitted electronically pursuant to
Republic Act No. 8792, otherwise known as the "Electronic
Commerce Act of 2000". Such declarations when printed and
certified by a competent customs officer as a faithful
reproduction of the electronic submission shall be considered
as actionable documents for purposes of prosecuting a
declarant if the declarations are found to be fraudulent.
Sec. 413. Description of Goods. – Under such terms and
conditions prescribed under the rules and regulations, the
description of the goods in the goods declaration must be
sufficient and specific in detail to enable the goods to be
identified for customs valuation, statistical purposes, and
classification to the appropriate tariff heading and subheading
in the currency of the invoice, and in such other particulars
necessary for the proper assessment and collection of duties
and taxes. The quantity and value of each of the several
classes of goods shall be separately declared according to their
respective headings or subheadings and the totals of each
heading or subheading shall be duly shown.
Sec. 414. Commercial and Noncommercial Invoice. –
Commercial invoice of imported goods shall contain the
following:ChanRoblesVirtualawlibrary
(a) The agreed price paid or to be p aid for the
goods;cralawlawlibrary
(b) The adjustments to the price paid or to be paid as defined
in Section 701(1) of this Act, if not yet included in the invoice,
as may be applicable;cralawlawlibrary
(c) The names of the buyer, seller, and the time and place of
sale;cralawlawlibrary
(d) The port of entry;cralawlawlibrary
(e) A sufficient description to enable the accurate identification
of goods for tariff classification, customs valuation, and
statistical purposes, indicating the correct commodity
description, in customary term or commercial designation, the
grade or quality, numbers, marks or symbols under which they
are sold by the seller or manufacturer, together with the marks
and number of packages in which the goods are
packed;cralawlawlibrary
(f) The quantities in the weights or measures of the goods
shipped; and
(g) Any other fact deemed necessary for the proper
examination, customs valuation, and tariff classification of the
goods as may be prescribed by rules and regulations.
To the extent possible, the above requirements shall also apply
to goods imported but not covered by sale, such as goods on
consignment or lease, samples, or donations, covered by a
consignment, pro forma invoice, or other noncommercial
invoice.
Sec. 415. Mode of Payment and Terms of Trade. – Subject to
existing laws and rules on foreign currency exchange, the
internationally accepted standards and practices on the mode
of payment or remittance covering import and export
transactions, including standards developed by international
trading bodies such as the International Chamber of
Commerce (ICC) on trading terms (incoterms) and on
international letters of credit such as the Uniform Customs and
Practice for Documentary Credits (UCPDC), shall be
recognized.
Sec. 416. Examination of Samples. – Customs officers shall
see to it that representative samples taken during examination
shall be properly receipted for and retained within a reasonable
period of time. The quantity and value of the samples taken
shall be noted in the specified box of goods declaration or
electronic form. Such samples shall be duly labeled as will
definitely identify them with the importation for which they are
taken.
Sec. 417. Forwarding of Cargo and Remains of Wrecked Vessel
or Aircraft. – When vessels or aircrafts are wrecked within the
Philippines, the original owners or consignees of the cargo, or
by its underwriters, in ease of abandonment, may seek
approval from the Bureau to forward the goods saved from the
wreck to the ports of destination without going through, the
customs office in the district in which the goods were cast
ashore or unloaded. Upon approval, the goods may be
forwarded with particular manifests and duly certified by a
customs officer in charge of the goods.
The owner of the vessel or aircraft may be permitted to export
the remains of the wreck upon proper examination and
inspection. The remains of a wrecked vessel shall include not
only its hull and rigging, but also all sea stores, goods and
equipment, such as sails, ropes and chain anchors.
Sec. 418. Derelicts and Goods from Abandoned Wrecks. –
Derelicts and all goods recovered from sea or from abandoned
wrecks shall be under the jurisdiction of the port where the
goods arrive, and shall be retained in the custody of the
Bureau. If not claimed by the owner, underwriter or salvor, the
same shall be deemed as property of the government.
When such goods are brought into port by lighters or other
11
craft, each vessel shall submit a manifest of their respective
cargo.
The customs officer nearest the scene of the wreck shall take
charge of the goods saved and shall give immediate notice to
the District Collector or the nearest customs office.
In order to prevent any attempt to commit fraud, the District
Collector shall be represented at the salvage of the cargo by
customs officers who shall examine and receive the inventory
made on the cargo.
Derelicts and goods salvaged from foreign vessels or aircrafts
recovered from sea or wreck are prima faciedutiable and may
be entered for consumption or warehousing. If claimed to be of
Philippine production, and consequently conditionally duty-
free, proof must be submitted as in ordinary cases of
reimportation of goods. Foreign goods landed from a vessel or
aircraft in distress is dutiable if sold or disposed of in the
Philippines.
Before any goods taken from a recent wreck are admitted to
the customs territory, the same shall be appraised, and the
owner or importer shall have the same right to appeal as in
ordinary importation.
No part of a Philippine vessel or aircraft or its equipment,
wrecked either in Philippine or foreign waters, shall be subject
to duty.
CHAPTER 2
EXAMINATION OF GOODS
Sec. 419. Examination of Goods. – Examination of goods,
when required by the Bureau, shall be conducted immediately
after the goods declaration has been lodged. Priority in the
examination shall be given to live animals, perishable goods
and other goods requiring immediate examination.
Whenever necessary, a system of coordination and joint
examination of goods shall be established by the Bureau and
other regulatory agencies under existing laws and regulations.
As a general rule, the Bureau may examine the goods in the
presence of the declarant or an authorized
representative. Examination of the goods in the absence of
the declarant or authorized representative may be allowed in
exceptional circumstance and for valid and justifiable grounds,
as may be defined by regulations promulgated by the
Secretary of Finance, upon recommendation of the
Commissioner. The Bureau may require the declarant to be
present or to be represented at the examination of the goods
or to render any assistance necessary to facilitate the
examination.
The Bureau shall take samples of the goods only when needed
to establish the tariff description and value of goods declared,
or to ensure compliance with this Act. Samples drawn shall be
as minimal as possible.
Sec. 420. Conditions for Examination.. – Pursuant to
internationally accepted standards, the Bureau may adopt
nonintrusive examination of goods, such as the use of x-ray
machines.
Physical examination of the goods shall be conducted
when:ChanRoblesVirtualawlibrary
(a) It is directed by the Commissioner on account of a
derogatory information;cralawlawlibrary
(b) The goods are subject to an Alert Order issued by
competent authority;cralawlawlibrary
(c) The goods are electronically selected for physical
examination;cralawlawlibrary
(d) There are issues and controversies surrounding the goods
declaration and the import clearance process; or
(e) The importer or declarant requests for the examination of
the goods.
The Commissioner may exempt from physical examination the
goods of authorized economic operators or of those provided
for under any existing trade facilitation program of the Bureau.
Physical examination, when required, shall be conducted in an
expeditious manner.
Sec. 421. Duties of Customs Officer Tasked to Examine the
Imported Goods., – In the examination, classification, and
valuation of the goods, the customs officer
shall:ChanRoblesVirtualawlibrary
(a) Determine whether the packages for examination and their
contents are in accordance with the goods declaration, invoice
and other pertinent documents;cralawlawlibrary
(b) Take samples of the imported goods for examination or
laboratory analysis when necessary;cralawlawlibrary
(c) Issue a receipt for a sample taken and retained during
examination; and
(d) Report whether the goods have been correctly declared as
to value, quantity, measurement, weight, tariff classification
and not imported contrary to law.
Failure on the part of the customs officer to perform the above
duties shall be penalized according to Section 1431 of Title XIV
of this Act.
Sec. 422. Customs Expenses Constituting Charges on Goods. –
The cost of examination shall be for the account of the
importer or exporter, subject to proper accounting and
documentation. All expenses incurred by the Bureau for the
handling or storage of goods and other necessary operations
shall be chargeable against the goods, and shall constitute a
lien thereon.
CHAPTER 3
ASSESSMENT AND RELEASE
Sec. 423. Determination of the De Minimis Value. – No duties
and taxes shall be collected on goods with an FOB or FCA value
often thousand pesos (P10,000.00) or below. The Secretary of
Finance shall adjust the de minimis value as provided herein
every three (3) years after the effectivity of this Act. The
value herein stated shall be adjusted to its present value using
the CPI, as published by the PSA.
Sec. 424. Duty of Customs Officer Tasked to Assess Imported
Goods. – For purposes of assessing duties and taxes on
imported goods, the customs officer shall classify, value, and
determine the duties and taxes to be paid. The customs officer
shall prepare and submit an assessment report as established
under this Act.
12
Sec. 425. Tentative Assessment of Goods Subject to Dispute
Settlement. – Assessment shall be deemed tentative if the
duties and taxes initially assessed are disputed by the
importer. The assessment shall be completed upon final
readjustment based on the tariff ruling in case of classification
dispute, or the final resolution of the protest case involving
valuation, rules of origin, and other customs issues.
The District Collector may allow the release of the imported
goods under tentative assessment upon the posting of
sufficient security to cover the applicable duties and taxes
equivalent to the amount that is disputed.
Sec. 426. Tentative Assessment of Provisional Goods
Declaration. – Assessment of a provisional goods declaration
shall be deemed tentative and such assessment shall be
completed upon final readjustment and submission by the
declarant of the additional information or documentation
required to complete the declaration within the period provided
in Section 403 of this Act.
Sec. 427. Readjustment of Appraisal, Classification or
Return. – Such appraisal, classification or return, as finally
passed upon and approved or modified by the District
Collector, shall not be altered or modified in any manner,
except:ChanRoblesVirtualawlibrary
(1) Within one (1) year after payment of the duties, upon
statement of error in conformity with Section 912 of this Act,
as approved by the District Collector;cralawlawlibrary
(2) Within fifteen (15) days after such payment, upon request
for reappraisal or reclassification addressed to the
Commissioner by the District Collector, if the appraisal or
classification is deemed to be low;cralawlawlibrary
(3) Upon request for reappraisal and/or reclassification, in the
form of a timely protest addressed to the District Collector by
the interested party if the latter should be dissatisfied with the
appraisal or return; or
(4) Upon demand by the Commissioner after the completion of
compliance audit in accordance with the provisions of this Act.
Sec. 428. Assessment of Duty on Less Than Entered Value. –
Duty shall not be assessed in any case upon an amount less
than the entered value, unless by direction of the
Commissioner in cases when the importer certifies at the time
of entry that the entered value is higher than the dutiable
value and that the goods are so entered in order to meet
increases made by the appraiser in similar cases then pending
re-appraisement; and the lower assessment shall be allowed
only when the importer's contention is sustained by a final
decision, and shall appear that such action of the importer was
taken in good faith after due diligence and inquiry.
Sec. 429. Final Assessment. – Assessment shall be deemed
final fifteen (15) days after receipt of the notice of assessment
by the importer or consignee.
Sec. 430. Period of Limitation. – In the absence of fraud and
when the goods have been finally assessed and released, the
assessment shall be conclusive upon all parties three (3) years
from the date of final payment of duties and taxes, or upon
completion of the post clearance audit.
Sec. 431. Release of Goods after Payment of Duties and
Taxes. – Goods declared shall be released when duties and
taxes and other lawful charges have been paid or secured and
all the pertinent laws, rules and regulations have been
complied with.
When the Bureau requires laboratory analysis of samples,
detailed technical documents or expert advice, it may release
the goods before the results of such examination are known
after posting of sufficient security by the declarant.
Sec. 432. Release of Goods to the Holder of Bill of Lading or
Airway Bill. – Any customs officer who releases goods to the
consignee or lawful holder of the bill of lading or airway bill
shall not be liable for any defect or irregularity in its
negotiation unless the customs officer has notice of the defect
or irregularity.
Sec. 433. Release of Goods Without Production, of Bill of
Lading or Airway Bill. – No customs officer shall release goods
to any person without the submission of the bill of lading or
airway bill covering the goods, except on written order of the
carrier or agent of the vessel or aircraft, in which case neither
the government nor the customs officer shall be held liable for
any damage arising from wrongful release of the
goods: Provided, That when the release of goods is made
against such written order, the customs officer shall require
the submission of a copy of the bill.
Sec. 434. Release of Goods Upon Order of Importer. – An
importer may issue a written authorization for the release of
goods stored in a bonded warehouse to another person. Such
authorization shall not relieve the importer from liability for the
duties, taxes and other charges due on the goods unless the
person to whom the release was authorized assumes such
liability.
Sec. 435. Withholding Release Pending Satisfaction of Lien. –
When the District Collector is duly notified through a lawful
order of a competent court of a Hen for freight, lighterage or
general average upon any imported goods, the District
Collector shall withhold the release of the goods unless the
claim has been paid or secured. In case of disagreement, the
District Collector may release the goods after payment of the
freight and lighterage due on the quantity or weight landed as
actually determined.
Sec. 436. Fine or Surcharge on Goods. – Goods subject to any
fine or surcharge shall be released only after the payment of
the fine or surcharge.
CHAPTER 4
SPECIAL PROCEDURES
Sec. 437. Traveler and Passenger Baggage. – The Bureau shall
provide simplified customs procedure for traveler and baggage
processing based on international agreements and customs
best practices.
Travelers shall be permitted to export goods for commercial
pm-poses, subject to compliance with the necessary export
formalities and payment of export duties, taxes and charges, if
any.
Sec. 438. Postal Item or Mail. – Postal item or mail shall
include letter-post and parcels, as described in international
practices and agreements, such as the Acts of the Universal
Postal Union (AUPU), currently in force.
A simplified procedure shall be used in the clearance of postal
item or mail, including the collection of the applicable duties
and taxes on such items or goods.
13
When all the information required by the customs are available
in the special declaration form for postal items as provided in
the AUPU or similar international agreements, the special
declaration form and supporting documents shall be the goods
declaration. However, a separate goods declaration shall be
required for the following:ChanRoblesVirtualawlibrary
(a) Goods whose value fall within the level that the
Commissioner has determined to be taxable and thus must be
covered by a goods declaration;cralawlawlibrary
(b) Prohibited and regulated goods;cralawlawlibrary
(c) Goods, the exportation of which must be certified; and
(d) Imported goods under a customs procedure other than for
consumption. '
Sec. 439. Express Shipment – The Bureau shall provide
simplified customs procedures based on international
standards and customs best practices for air shipments
considered as time-sensitive and requiring pre-arrival
clearance. Express shipments of accredited air express cargo
operators may be released prior to the payment of the duty,
tax and other charges upon posting of a sufficient security.
Sec. 440. Establishment of Advance Customs Clearance and
Control Program. – The Bureau may establish and implement a
voluntary program on advance customs clearance and control
on containerized cargoes. The details of the voluntary advance
customs clearance shall be subject to the rules and regulations
to be issued by the Bureau after conducting the necessary
public hearings and consultations with the concerned sectors.
TITLE V
EXPORT CLEARANCE AND FORMALITIES
CHAPTER 1
EXPORT CLEARANCE AND DECLARATION
Sec. 500. Export Declaration. – All goods exported from the
Philippines, whether subject to export duty or not, shall be
declared through a competent customs office through an
export declaration, duly signed electronically or otherwise by
the party making the declaration.
The description of the goods in the export declaration must
contain sufficient and specific information for statistical
purposes as well as for the proper valuation and classification
of the goods.
Sec. 501. Export Product to Conform to Standard Grades. – If
applicable, products shall conform to export standard grades
established by the government. The packaging of the said
goods shall likewise be labeled and marked, in accordance with
related laws and regulations. Export declaration may not be
granted for goods violating the aforementioned requirements.
Sec. 502. Lodgement and Processing of Export Declaration. –
The Bureau shall promulgate rules and regulations to allow
manual and electronic lodgement and processing of the export
declaration.
Sec. 503. Rules of Origin.. – Pursuant to the applicable rules of
origin, the Bureau or any other designated government agency
may determine the origin of goods for export and, if
appropriate, issue the corresponding certificates of
origin. However, the exporter may adopt a self-certification
system: Provided, That it is duly accredited by the Bure au or
any other authorized government agencies.
TITLE VI
CUSTOMS TRANSIT AND TRANSSHIPMENT
CHAPTER 1
CUSTOMS TRANSIT
Sec. 600. Customs Transit in the Customs Territory. – Customs
transit within the customs territory shall be allowed for goods
except those intended for consumption, to be transported as
follows:ChanRoblesVirtualawlibrary
(a) From port of entry to another port of entry as exit point for
outright exportation;cralawlawlibrary
(b) From port of entry to another port of entry or inland
customs office;cralawlawlibrary
(c) From inland customs office to a port of entry as exit point
for outright exportation; and
(d) From one port of entry or inland customs office to another
port of entry or inland customs office.
A transit permit is required for goods transported under
customs transit. However, transfer of goods in customs transit
from one means of transport to another shall be
allowed: Provided, That any customs seal or fastening is not
broken or tampered.
The party responsible for the compliance of the obligations
imposed on customs transit shall ensure that the goods are
presented intact and in due course at the customs office of
destination. Failure to comply with the aforementioned
obligations or like-wise failure to follow a prescribed itinerary
or period for delivery of the goods may immediately subject
the goods to the corresponding duties, taxes and other
applicable fines, penalties, and surcharges.
SBC. 601. Duty and Tax on Goods Intended for Transit. –
Transit goods admitted for storage in a customs bonded
warehouse, or for outright exportation at the port of
destination or inland customs office, and goods intended for
transit covered by Republic Act No. 10668, otherwise known as
"An Act Allowing Foreign Vessels to Transport and Co-Load
Foreign Cargoes for Domestic Transshipment and for Other
Purposes", shall not be subject to the payment of duties and
taxes at the port of entry: Provided, That any conditions and
security required by the Bureau are complied with.
Goods for consumption and other goods intended for customs
transit not covered by the immediately preceding paragraph
shall be subject to the payment of duties and taxes at the port
of discharge.
Sec. 602. Carrier's Security. – Carriers that transport imported
goods that shall be placed under customs transit from a port of
entry to other ports, shall post a general transportation
security amounting to at least fifty thousand pesos
(P50,000.00). Such security shall ensure the complete and
14
immediate delivery of goods to the customs officer at the port
of destination and the payment of pertinent customs charges
and expenses and other transfer costs. The amount of the
security may be adjusted by the Commissioner, upon approval
of the Secretary of Finance.
CHAPTER 2
CUSTOMS TRANSSHIPMENT
Sec. 603. Customs Transshipment. – Goods admitted for
transshipment shall not be subject to the payment of duties
and taxes: Provided, That the goods declaration for customs
transshipment particularly indicates such nature of the goods,
duly supported by commercial or transport documents or
evidence as required by the Bureau.
Goods for transshipment must be exported from the
Philippines within thirty (30) days from arrival thereof. The
Commissioner may allow an extension of such period after the
establishment of valid reasons.
Sec. 604. Goods Entered for Immediate Reexportation. –
Where an intent of reexportation of the goods is shown by the
bill of lading, invoice, manifest, or other satisfactory evidence,
the whole or a part of a bill comprising not less than one
package may be entered for immediate reexportation under
security. The District Collector shall designate the vessel or
aircraft in which the goods are loaded constructively as a
warehouse to facilitate the direct transfer of the goods to the
exporting vessel or aircraft.
Unless it shall appear in the bill of lading, airway bill, invoice,
manifest, or other satisfactory evidence, that goods arriving in
the Philippines are destined for transshipment, no exportation
thereof will be permitted except under entry for immediate
reexportation under sufficient security in an amount equal to
the ascertained duties, taxes and other charges.
Upon the reexportation of the goods, and the production of
proof of landing beyond the limits of the Philippines, the
security shall be released.
TITLE VII
IMPORT DUTY AND TAX
CHAPTER 1
BASIS OF VALUATION
Sec. 700. Sequential Application of Valuation Methods. –
Imported goods shall be valued in accordance with the
provisions of Section 701 of this Act whenever the conditions
prescribed therein are fulfilled.
Where the customs value cannot be determined under the
provisions of Section 701 of this Act, it is to be determined by
proceeding sequentially through the succeeding sections hereof
to the first such section under which the customs value can be
determined. Except as provided in Section 704 of this Act, it is
only when the customs value cannot be determined under the
provisions of a particular section that the provisions of the next
section in the sequence can be used.
If the importer does not request that the order of Sections 704
and 705 of this Act be reversed, the normal order of the
sequence is to be followed. If the importer so requests but it is
impossible to determine the customs value under Section 705
of this Act, the customs value shall be determined under
Section 704.
When the customs value cannot be determined under Sections
701 through 705, it may be determined under Section 706 of
this Act.
Sec. 701, Transaction Value System – Method One. – The
transaction value shall be the price actually paid or payable for
the goods when sold for export to the Philippines adjusted in
accordance with the provisions of tins
section: Provided, That:ChanRoblesVirtualawlibrary
(a) There are no restrictions as to the disposition or use of the
goods by the buyer other than restrictions
which:ChanRoblesVirtualawlibrary
(i) Are imposed or required by law or by Philippine
authorities;cralawlawlibrary
(ii) Limit the geographical area in which the goods may be
resold; or
(iii) Do not substantially affect the value of the
goods;cralawlawlibrary
(b) The sale or price is not subject to some condition or
consideration for which a value cannot be determined with
respect to the goods being valued; and
(c) The buyer and the seller are not related, or where the
buyer and the seller are related, that the transaction value is
acceptable for customs purposes under the provisions hereof.
For purposes of this Act, persons shall be deemed related only
if:ChanRoblesVirtualawlibrary
(i) They are officers or directors of one another's
business;cralawlawlibrary
(ii) They are legally recognized partners in
business;cralawlawlibrary
(iii) There exists an employer-employee relationship between
them;cralawlawlibrary
(iv) Any person directly or indirectly owns, controls or holds
five percent (5%) or more of the outstanding voting stocks or
shares of both seller and buyer;cralawlawlibrary
(v) One of them directly or indirectly controls the
other;cralawlawlibrary
(vi) Both of them are directly or indirectly controlled by a third
person;cralawlawlibrary
(vii) Together they directly or indirectly control a third person;
or
(viii) They are members of the same family, including those
related by affinity or consanguinity up to the fourth civil
degree.
Persons who are associated in business with one another in
that one is the sole agent, sole distributor or sole
concessionaire, however described, of the other shall be
deemed to be related for the purposes of this Act if they fall
within, any of the eight (8) cases cited in the preceding
paragraph.
In a sale between related persons, the transaction value shall
15
be accepted as basis for customs valuation whenever the
importer demonstrates that such value closely approximates
one of the following occurring at or about the same
time:ChanRoblesVirtualawlibrary
(a) The transaction value in sales to unrelated buyers of
identical or similar goods for export to the same country of
importation;cralawlawlibrary
(b) The customs value of identical or similar goods as
determined under the provisions of Section 704 of this Act; or
(c) The customs value of identical or similar goods are
determined under the provisions of Section 705 of this Act.
In determining the transaction value, the following shall be
added to the price actually paid or payable for the imported
goods:ChanRoblesVirtualawlibrary
(1) To the extent that they are incurred by the buyer but are
not included in the price actually paid or payable for the
imported goods:ChanRoblesVirtualawlibrary
(a) Commissions and brokerage fees except buying
commissions;cralawlawlibrary
(b) Cost of containers;cralawlawlibrary
(c) Cost of packing, whether for labor or
materials;cralawlawlibrary
(d) Value, apportioned as appropriate, of the following goods
and services: materials, components, parts and similar items
incorporated in the imported goods; tools; dies; moulds and
similar items used in the production of imported goods;
materials consumed in the production of the imported goods;
and engineering, development, artwork, design work and plans
and sketches undertaken elsewhere than in the Philippines and
necessary for the production of imported goods, where such
goods and services are supplied directly or indirectly by the
buyer free of charge or at a reduced cost for use in connection
with the production and sale for export of the imported goods;
and
(e) Amount of royalties and license fees related to the goods
being valued that the buyer must pay either directly or
indirectly, as a condition of sale of the goods to the buyer.
(2) Value of any part of the proceeds of any subsequent
resale, disposal or use of the imported goods that accrues
directly or indirectly to the seller;cralawlawlibrary
(3) Cost of transport of the imported goods from the port of
exportation to the port of entry in the
Philippines;cralawlawlibrary
(4) Loading, unloading and handling charges associated with
the transport of the imported goods from, the country of
exportation to the port of entry in the Philippines; and
(5) Cost of insurance.
All additions to the price actually paid or payable shall be made
only on the basis of objective and quantifiable data.
Sec. 702. Transaction Value of Identical Goods – Method
Two. – Where the dutiable value cannot be determined under
method one, the dutiable value shall be the transaction value
of identical goods sold for export to the Philippines and
exported at or about the same time as the goods being
valued. For purposes of this section, "Identical goods" refer to
goods which are the same in all respects, including physical
characteristics, quality and reputation. Minor differences in
appearances shall not preclude goods otherwise conforming to
the definition from being regarded as identical.
If, in applying this section, more than one transaction value of
identical goods are found, the lowest value shall be used to
determine the customs value.
Sec. 703. Transaction Value of Similar Goods - Method
Three. – Where the dutiable value cannot be determined under
the preceding method, the dutiable value shall be the
transaction value of similar goods sold for export to the
Philippines and exported at or about the same time as the
goods being valued. For purposes of this section, "Similar
goods" refer to goods which, although not alike in all respects,
have like characteristics and similar component materials
which enable them to perform the same functions and to be
commercially interchangeable. The quality of the goods, its
reputation and the existence of a trademark shall be among
the factors to be considered in determining whether goods are
similar.
If, in applying this section, more than one transaction value of
identical goods are found, the lowest such value shall be used
to determine the customs value.
Sec. 704. Deductive Value – Method Four. – Where the
dutiable value cannot be determined under the preceding
method, the dutiable value shall be the deductive value unless
otherwise requested by the importer as provided in Section
700 hereof. The deductive value which shall be based on the
unit price at which the imported goods or identical or similar
imported goods are sold in the Philippines, in the same
condition as when imported, in the greatest aggregate
quantity, at or about the time of the importation of the goods
being valued, to persons not related to the persons from whom
they buy such goods, subject to deductions for the
following:ChanRoblesVirtualawlibrary
(1) Either the commissions usually paid or agreed to be paid or
the additions usually made for profit and general expenses in
connection with sales in such country of imported goods of the
same class or kind;cralawlawlibrary
(2) The usual costs of transport and insurance and associated
costs incurred within the Philippines;cralawlawlibrary
(3) Where appropriate, the costs of: (i) transport of the
imported goods from the port of exportation to the port of
entry in the Philippines; (ii) loading, unloading and handling
charges associated with the transport of the imported goods
from the country of exportation to the port of entry in the
Philippines; and (iii) insurance; and
(4) The customs duties and other national taxes payable in the
Philippines by reason of the importation or sale of the goods.
If neither the imported goods nor identical nor similar imported
goods are sold at or about the time of importation of the goods
being valued in the Philippines in the conditions they were
imported, the customs value shall, subject to the conditions
set forth in the preceding paragraph, be based on the unit
price at which the imported goods or identical or similar
imported goods sold in the Philippines in the condition they
were imported and at the earliest date after the importation of
the goods being valued, but before the expiration of ninety
(90) days after such importation.
If neither the imported goods nor identical nor similar imported
goods are sold in the Philippines in the condition as imported,
16
then, if the importer so requests, the dutiable value shall be
based on the unit price at which the imported goods, after
further processing, are sold in the greatest aggregate quantity
to persons in the Philippines who are not related to the persons
from whom they buy such goods, subject to allowance for the
value added by such processing and deductions provided under
subsections (1), (2), (3) and (4) hereof.
Sec. 705. Computed Value – Method Five. – Where the
dutiable value cannot be determined under the preceding
method, the dutiable value shall be the computed value of the
sum of:ChanRoblesVirtualawlibrary
(1) The cost or the value of materials and fabrication or other
processing employed in producing the imported
goods;cralawlawlibrary
(2) The amount for profit and general expenses equal to that
usually reflected in the sale of goods of the same class or kind
as the goods being valued which are made by producers in the
country of exportation for export to the
Philippines;cralawlawlibrary
(3) The freight, insurance fees and other transportation
expenses for the importation of the goods;cralawlawlibrary
(4) Any assist, if its value is not included under paragraph (1)
hereof; and
(5) The cost of containers and packing, if their values are not
included under paragraph (1) hereof.
The Bureau shall not require or compel any person not residing
in the Philippines to produce for examination, or to allow
access to, any account or other record for the purpose of
determining a computed value. However, information supplied
by the producer of the goods for the purposes of determining
the customs value may be verified in another country with the
agreement of the producer and provided that said producer will
give sufficient advance notice to the government of the
country in question and that the latter does not object to the
investigation.
Sec. 706. Fallback Value–Method Six. – If the dutiable value
cannot be determined under the preceding methods described
above, it shall be determined by using other reasonable means
and on the basis of data available in the Philippines. If the
importer so requests, the importer shall be informed in writing
of the dutiable value determined under method six and the
method used to determine such value.
No dutiable value shall be determined under method six on the
basis of:ChanRoblesVirtualawlibrary
(1) The selling price in the Philippines of goods produced in the
Philippines;cralawlawlibrary
(2) A system that provides for the acceptance for customs
purposes of the higher of two (2) alternative
values;cralawlawlibrary
(3) The price of goods in the domestic market of the country of
exportation;cralawlawlibrary
(4) The cost of production, other than computed values, that
have been determined for identical or similar goods in
accordance with method five hereof;cralawlawlibrary
(5) The price of goods for export to a country other than the
Philippines;cralawlawlibrary
(6) Minimum customs values; or
(7) Arbitrary or fictitious values.
Sec. 707. Ascertainment of the Accuracy of the Declared
Value. – Nothing in this section shall be construed as
restricting or calling into question the right of the Bureau to
ascertain the truth or accuracy of any statement, document or
declaration presented for customs valuation purposes. When a
declaration has been presented and when the Bureau has
reason to doubt the truth or accuracy of the particulars or of
documents produced in support of such declaration, it may ask
the importer to provide further explanation, including
documents or other evidence, that the declared value
represents the total amount actually paid or payable for the
imported goods, adjusted in accordance with the provisions of
Section 701 of this Act.
If in the course of determining the dutiable value of imported
goods, it becomes necessary to delay the final determination
of such dutiable value, the importer shall nevertheless be able
to secure the release of the imported goods upon posting of a
sufficient security in an amount equivalent to the duties and
taxes in dispute conditioned on the payment of additional
duties and taxes, if any, as may be determined: Provided, That
prohibited goods shall not be released under any circumstance.
If, after receiving further information, or in the absence of a
response, the Bureau still has reasonable doubts on the truth
or accuracy of the declared value, it may deem that the
customs value of the imported goods cannot be determined
under method one, without prejudice to an importer's right to
appeal pursuant to Section 1104 of this Act. Before taking a
final decision, the District Collector shall communicate to the
importer, in writing if requested, the grounds for doubting the
truth or accuracy o£ the particulars or documents produced
and give the importer a reasonable opportunity to respond.
When a final decision is made, the Bureau shall communicate
its decision, and the grounds therefor in writing.
Sec. 708. Exchange Rate. – For the assessment and collection
of import duty upon imported goods and for other purposes,
the value and prices thereof quoted in foreign currency shall be
converted into the currency of the Philippines at the current
rate of exchange or value specified or published, from time to
time, by the Bangko Sentral ng Pilipinas (BSP).
CHAPTER 2
SPECIAL DUTIES AND TRADE REMEDY MEASURES
Sec. 709. Government's Right of Compulsory Acquisition. – In
order to protect government revenues against undervaluation
of goods, the Commissioner may, motu proprio or upon the
recommendation of the District Collector, acquire imported
goods under question for a price equal to their declared
customs value plus any duties already paid on the goods,
payment for which shall be made within ten (10) working days
from issuance of a warrant signed by the Commissioner for the
acquisition of such goods.
An importer who is dissatisfied with a decision of the
Commissioner pertaining to this section may, within twenty
(20) working days after the date on which notice of the
decision is given, appeal to the Secretary of Finance, and
thereafter If still dissatisfied, to the CTA as provided for in
Section 1136 of this Act.
Where no appeal is made by the importer, or upon
reaffirmation of the Commissioner's decision during the
17
appeals process, the Bureau or its agents shall sell the
acquired goods pursuant to existing laws and regulations.
Nothing in this section limits or affects any other powers of the
Bureau with respect to the disposition of the goods or any
liability of the importer or any other person with respect to an
offense committed in the importation of the goods.
Sec. 710. Marking of Imported Goods and Containers. – (A)
Marking of Goods, – Except as hereinafter provided, all goods
of foreign origin imported into the Philippines or their
containers, as provided in subsection (B) hereof shall be
conspicuously marked in any official language of the
Philippines as legibly, indelibly and permanently as the nature
of the goods or container will permit and in such manner as to
indicate to an ultimate purchaser in the Philippines the name of
the country of origin of the goods. Pursuant thereto, the
Commissioner shall, with the approval of the Secretary of
Finance:ChanRoblesVirtualawlibrary
(1) Determine the character of words and phrases or
abbreviation thereof which shall be acceptable as indicating the
country of origin and prescribe any reasonable method of
marking, whether by printing, stenciling, stamping, branding,
labeling or by any other reasonable method, and in a
conspicuous place on the goods or container where the
marking' shall appear;cralawlawlibrary
(2) Require the addition of other words or symbols which may
be appropriate to prevent deception or mistake as to the origin
of the goods or as to the origin of any other goods with which
such imported goods is usually combined subsequent to
importation but before delivery to an ultimate purchaser; and
(3) Authorize the exception of any goods from the
requirements of marking if:ChanRoblesVirtualawlibrary
(i) Such goods are incapable of being marked;cralawlawlibrary
(ii) Such goods cannot be marked prior to shipment to the
Philippines without injury;cralawlawlibrary
(iii) Such goods cannot be marked prior to shipment to the
Philippines, except at an expense economically prohibitive of
their importation;cralawlawlibrary
(iv) The marking of a container of such goods will reasonably
indicate the origin of such goods;cralawlawlibrary
(v) Such goods are crude substances;cralawlawlibrary
(vi) Such goods are imported for use by the importer and not
intended for sale in their imported or any other
form;cralawlawlibrary
(vii) Such goods are to be processed in the Philippines by the
importer or for the importer's account other than for the
purpose of concealing the origin of such goods and in such
manner that any mark contemplated by this section would
necessarily be obliterated, destroyed, or permanently
concealed;cralawlawlibrary
(viii) An ultimate purchaser, by reason of the character of such
goods or by reason of the circumstances of their importation,
must necessarily know the country of origin of such goods
even though they are not marked to indicate their
origin;cralawlawlibrary
(ix) Such goods were produced more than twenty (20) years
prior to their importation into the Philippines; or
(x) Such goods cannot be marked after importation except at
an expense which is economically prohibitive, and the failure to
mark the goods before importation was not due to any purpose
of the importer, producer, seller or shipper to avoid compliance
with this section.
(B) Marking of Containers. – Whenever goods are exempt
under paragraph (3) of subsection (A) of this section from the
requirements of marking, the immediate container, if any, of
such goods, or such other container or containers of such
goods, shall be marked in such manner as to indicate to an
ultimate purchaser in the Philippines the name of the country
of origin of such goods in any official language of the
Philippines, subject to all provisions of this section, including
the same exceptions as are applicable to goods under
paragraph (3) of subsection (A).
(C) Pine for Failure to Mark. – If, at the time of importation
any good or its container, as provided in subsection (B) hereof,
is not marked in accordance with the requirements of this
section, there shall be levied, collected, and paid upon such
good a marking duty of five percent (5%) of dutiable value,
which shall be deemed to have accrued at the time of
importation,
(D) Release Withheld Until Marked. – No imported goods held
in customs custody for inspection, examination, or assessment
shall be released until such goods or their containers shall
have been marked in accordance with the requirements of this
section and until the amount of duty estimated to be payable
under subsection (C) of this section shall have been deposited.
(E) The failure or refusal of the owner or importer to mark the
goods as herein required within a period of thirty (30) days
after due notice shall constitute as an act of abandonment of
said goods and their disposition shall be governed by the
provisions of this Act relative to abandonment of imported
goods.
Sec. 711. Dumping Duty. –
The provisions of Republic Act No. 8752, otherwise known as
the "Anti-Dumping Act of 1999", are hereby adopted.
Sec. 712. Safeguard Duty. – The provisions of Republic Act No.
8800, otherwise known as the "Safeguard Measures Act", are
hereby adopted.
Sec. 713. Countervailing Duty. –
The provisions of Republic Act No. 8751, otherwise known as
"An Act Strengthening the Mechanisms for the Imposition of
Countervailing Duties on Imported Subsidized Products,
Commodities or Articles of Commerce in Order to Protect
Domestic Industries from Unfair Trade Competition, Amending
for the Purpose Section 302, Part 2, Title II, Book I of
Presidential Decree No. 1464", otherwise known as the "Tariff
and Customs Code of the Philippines, as Amended", are hereby
adopted.
Sec. 714. Discrimination by Foreign Countries. – Without
prejudice to the Philippine commitment in any ratified
international agreements or treaty, the following recourse shall
be applicable in case of discrimination by foreign
countries:ChanRoblesVirtualawlibrary
(a) When the President finds that the public interest will be
served thereby, the President shall, by proclamation, specify
and declare new or additional duties in an amount not
exceeding one hundred percent (100%) ad valorem upon
goods wholly or in part the growth or product of, or imported
18
in a vessel of any foreign country whenever the President shall
find as a fact that such country:ChanRoblesVirtualawlibrary
(1) Imposes, directly or indirectly, upon the disposition or
transportation in transit or through reexportation from such
country of any goods wholly or in part the growth or product of
the Philippines, any unreasonable charge, exaction, regulation
or limitation which is not equally enforced upon the like goods
of every foreign country; or
(2) Discriminates in fact against the commerce of the
Philippines, directly or indirectly, by law or administrative
regulation or practice, by or in respect to any customs,
tonnage, or port duty, fee, charge, exaction, classification,
regulation, condition, restriction or prohibition, in such manner
as to place the commerce of the Philippines at a disadvantage
compared with the commerce of any foreign country.
(b) If at any time the President shall find it to be a fact that
any foreign country has not only discriminated against the
commerce of the Philippines, as aforesaid, but has, after the
issuance of a proclamation as authorized in subsection (a) of
this section, maintained or increased its said discrimination
against the commerce of the Philippines, the President is
hereby authorized, if deemed consistent with the interests of
the Philippines and of public interest, to issue a further
proclamation directing that such product of said country or
such goods imported in their vessels be excluded from
importation into the Philippines.
(c) Any proclamation issued by the President under this section
shall, if the President deems it consistent with the interest of
the Philippines, extend to the whole of any foreign country or
may be confined to any subdivision or subdivisions
thereof: Provided, That the President may, whenever the
public interest requires, suspend, revoke, supplement or
amend any such proclamation.
(d) All goods imported contrary to the provisions of this section
shall be forfeited to the government of the Philippines and shall
be liable to be seized, prosecuted and condemned in like
manner and under the same regulations, restrictions, and
provisions as may from time to time be established for the
recovery, collection, distribution, and remission or forfeiture to
the government by the tariff and customs laws. Whenever the
provision of this section shall be applicable to importations into
the Philippines of goods wholly or in part the growth or product
of any foreign country, it shall be applicable thereto, whether
such goods are imported directly or indirectly.
(e) It shall be the duty of the Commission to ascertain and at
all times be informed whether any of the discriminations
against the commerce of the Philippines enumerated in
subsections (a) and (b) of this section are practiced by any
country; and if and when such discriminatory acts are
disclosed, it shall be the duty of the Commission to bring the
matter to the attention of the President, and to recommend
measures to address such discriminatory acts.
(f) The Secretary of Finance shall make such rules and
regulations as are necessary for the execution of a
proclamation that the President may issue in accordance with
the provisions of this section.
TITLE VIII
TAX AND DUTY DEFERMENT, PREFERENCE AND EXEMPTION
CHAPTER 1

CONDITIONALLY TAX AND/OR DUTY-EXEMPT IMPORTATION
Sec. 800. Conditionally Tax and/or Duty-Exempt
Importation. – The following goods shall be exempt from the
payment of import duties upon compliance with the formalities
prescribed in the regulations which shall be promulgated by
the Commissioner with the approval of the Secretary of
Finance: Provided, That goods sold, bartered, hired or used for
purposes other than what they were intended for and without
prior payment of the duty, tax or other charges which would
have been due and payable at the time of entry if the goods
had been entered without the benefit of this section, shall be
subject to forfeiture and the importation shall constitute a
fraudulent practice against customs laws: Provided, however,
That a sale pursuant to a judicial order or in liquidation of the
estate of a deceased person shall not be subject to the
preceding proviso, without prejudice to the payment of duties,
taxes and other charges: Provided, further, That the President
may, upon the recommendation of the Secretary of Finance,
suspend, disallow or completely withdraw, in whole or in part,
any conditionally free importation under this
section:ChanRoblesVirtualawlibrary
(a) Aquatic products such as fishes, crustaceans, mollusks,
marine animals, seaweeds, fish oil, roe, caught or gathered by
fishing vessels of Philippine registry: Provided, That they are
imported in such vessels or in crafts attached
thereto: Provided, however, That they have not been landed in
any foreign territory or, if so landed, that they have been
landed solely for transshipment without having been advanced
in condition;cralawlawlibrary
(b) Equipment for use in the salvage of vessels or aircrafts, not
available locally, upon identification and the giving of a
security in an amount equal to one hundred percent (100%) of
the ascertained duties, taxes and other charges thereon,
conditioned for the exportation thereof or payment of
corresponding duties, taxes and other charges within six (6)
months from the date of acceptance of the goods
declaration: Provided, That the Bureau may extend the time
for exportation or payment of duties, taxes and other charges
for a term not exceeding sis (6) months from the expiration of
the original period;cralawlawlibrary
(c) Cost of repairs, excluding the value of the goods used,
made in foreign countries upon vessels or aircraft documented,
registered or licensed in the Philippines, upon proof
satisfactory to the Bureau: (1) that adequate facilities for such
repairs are not afforded in the Philippines; or (2) that such
vessels or aircrafts, while in the regular course of their voyage
or flight, were compelled by stress of weather or other casualty
to put into a foreign port to make such repairs in order to
secure the safety, seaworthiness, or airworthiness of the
vessels or aircrafts to enable them to reach their port of
destination;cralawlawlibrary
(d) Goods brought into the Philippines for repair, processing or
reconditioning to be reexported upon completion of the repair,
processing or reconditioning: Provided, That the Bureau shall
require security equal to one hundred percent (100%) of the
duties, taxes and other charges thereon, conditioned for the
exportation thereof or payment of the corresponding duties,
taxes and other charges within six (6) months from the date of
acceptance of the goods declaration;cralawlawlibrary
(e) Medals, badges, cups, and other small goods bestowed as
trophies or prizes, or those received or accepted as honorary
distinction;cralawlawlibrary
(f) Personal and household effects belonging to returning
19
residents including household appliances, jewelry, precious
stones, and other goods of luxury which were formally
declared and listed before departure and identified under oath
before the District Collector when exported from the
Philippines by such returning residents upon their departure
therefrom or during their stay abroad; personal and household
effects including wearing apparel, goods of personal
adornment, toilet goods, instruments related to one's
profession and analogous personal or household effects,
excluding luxury items, vehicles, watercrafts, aircrafts and
animals purchased in foreign countries by residents of the
Philippines which were necessary, appropriate, and normally
used for their comfort and convenience during their stay
abroad, accompanying them on their return, or arriving within
a reasonable time which, barring unforeseen and fortuitous
events, in no case shall exceed sixty (60) days after the
owner's return.
For purposes of this section, the phrase "returning residents"
shall refer to nationals who have stayed in a foreign country
for a period of at least sis (6) months. Returning residents
shall have tax and duty exemption on personal and household
effects: Provided, That:ChanRoblesVirtualawlibrary
(1) It shall not be in commercial quantities;cralawlawlibrary
(2) It is not intended for barter, sale or for hire; and
(3) Limited to the FCA or FOB value
of:ChanRoblesVirtualawlibrary
(i) Three hundred fifty thousand pesos (P350,000.00) for those
who have stayed in a foreign country for at least ten (10)
years and have not availed of this privilege within ten (10)
years prior to returning resident's arrival;cralawlawlibrary
(ii) Two hundred fifty thousand pesos (P250,000.00) for those
who have stayed in a foreign country for a period of at least
five (5) but not more than ten (10) years and have not availed
of this privilege within five (5) years prior to returning
resident's arrival; or
(iii) One hundred fifty thousand pesos (P150,000.00) for those
who have stayed in a foreign country for a period of less than
five (5) years and have not availed of this privilege within six
(6) months prior to returning resident's arrival.
Any amount in excess of the above-stated threshold shall be
subject to the corresponding duties and taxes under this Act.
Every three (3) years after the effectivity of this Act, the
Secretary of Finance shall adjust the amount herein stated to
its present value using the CPI as published by the PSA.
In addition to the privileges granted under the immediately
preceding paragraph, returning Overseas Filipino Workers
(OFWs) shall have the privilege to bring in, tax and duty-free,
home appliances and other durables, limited to one of every
kind once in a given calendar year accompanying them on
their return, or arriving within a reasonable time which,
barring unforeseen and fortuitous events, in no case shall
exceed sixty (60) days after every returning OFW's return
upon presentation of their original passport at the port of
entry: Provided, That any amount in excess of FCA value of
one hundred fifty thousand pesos (P150,000.0,0) for personal
and household effects or of the number of duty-free appliances
as provided for under this section, shall be subject to the
corresponding taxes and duties: Provided, further, That every
three (3) years after the effectivity of this Act, the Secretary of
Finance shall adjust the amount herein stated to its present
value using the CPI as published by the PSA;cralawlawlibrary

(g) Residents of the Philippines, OFWs or other Filipinos while
residing abroad or upon their return to the Philippines shall be
allowed to bring in or send to their families or relatives in the
Philippines balikbayan boxes which shall be exempt from
applicable duties and taxes imposed under the NIRC of 1997,
as amended: Provided, That balikbayan boxes shall contain
personal and household effects only and shall neither be in
commercial quantities nor intended for barter, sale or for hire
and that the FCA value of which shall not exceed one hundred
fifty thousand pesos (P150,000.00): Provided, further, That
every three (3) years after the effectivity of this Act, the
Secretary of Finance shall adjust the amount herein stated to
its present value using the CPI as published by the
PSA: Provided, finally, That residents of the Philippines, OFWs
or other Filipinos can only avail of this privilege up to three (3)
times in a calendar year. Any amount in excess of the
allowable non-dutiable value shall be subject to the applicable
duties and taxes;cralawlawlibrary
(l) For purposes of this Act, OFWs refer to holders of valid
passports duly issued by the Department of Foreign Affairs
(DFA) and certified by the Department of Labor and
Employment (DOLE) or the Philippine Overseas Employment
Administration (POEA) for overseas employment purposes.
They cover all Filipinos, working in a foreign country under
employment contracts, regardless of their professions, skills or
employment status in a foreign country; and (2) Calendar Year
refers to the period from January 1 to December 31.
(h) Wearing apparel, goods of personal adornment, toilet
goods, portable tools and instruments, theatrical costumes and
similar effects accompanying travelers, or tourists, or arriving
within a reasonable time before or after their arrival in the
Philippines, which, are necessary and appropriate for the wear
and use of such persons according to the nature of the
journey, their comfort and convenience: Provided, That this
exemption shall not apply to goods intended for other persons
or for barter, sale or hire: Provided, however, That the Bureau
may require either a written commitment or a security in an
amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon,
conditioned for the exportation thereof or payment of the
corresponding duties, taxes and other charges within three (3)
months from the date of acceptance of the goods
declaration: Provided, further, That the Bureau may extend the
time for exportation or payment of duties, taxes and other
charges for a term not exceeding three (3) months from the
expiration of the original period.
Personal and household effects and vehicles belonging to
foreign consultants and experts hired by, or rendering service
to, the government, and their staff or personnel and families
accompanying them or arriving within a reasonable time
before or after their arrival in the Philippines, in quantities and
of the kind necessary and suitable to the profession, rank or
position of the person importing said items, for their own use
and not for barter, sale or hire: Provided, That the Bureau may
require either a written commitment or a security in an
amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon, upon the
goods classified under this subsection; conditioned for the
exportation thereof or payment of the corresponding duties,
taxes and other charges within three (3) months after the
expiration of their term or contract: Provided, however, That
the Bureau may extend the time for exportation or payment of
duties, taxes and other charges for a term not exceeding three
(3) months from the expiration of the original
period;cralawlawlibrary
(i) Professional instruments and implements, tools of trade,
20
occupation or employment, wearing apparel, domestic animals,
and personal and household effects belonging to persons
coming to settle in the Philippines or Filipinos or their families
and descendants who are now residents or citizens of other
countries, such parties hereinafter referred to as overseas
Filipinos, in quantities and of the class suitable to the
profession, rank or position of the persons importing said
items, for their own use and not for barter or sale,
accompanying such persons, or arriving within a reasonable
time: Provided, That the Bureau may, upon the production of
satisfactory evidence that such persons are actually coming to
settle in the Philippines and that the goods are brought from
their former place of abode, exempt such goods from the
payment of duties and taxes: Provided, further, That vehicles,
vessels, aircrafts, machineries and other similar goods for use
in manufacture, shall not fall within this classification and shall
therefore be subject to duties, taxes and other
charges;cralawlawlibrary
(j) Goods used exclusively for public entertainment, and for
display in public expositions, or for exhibition or competition
for prizes, and devices for projecting pictures and parts and
appurtenances thereof, upon identification, examination, and
appraisal and the giving of a security in an amount equal to
one hundred percent (100%) of the ascertained duties, taxes
and other charges thereon, conditioned for exportation thereof
or payment of the corresponding duties, taxes and other
charges within three (3) months from the date of acceptance
of the goods declaration: Provided, That the Bureau may
extend the time for exportation or payment of duties, taxes
and other charges for a term not exceeding three (3) months
from the expiration of the original period; and technical and
scientific films when imported by technical, cultural and
scientific institutions, and not to be exhibited for
profit: Provided, further, That if any of the films is exhibited for
profit, the proceeds therefrom shall be subject to confiscation,
in addition to the penalty provide under this
Act;cralawlawlibrary
(k) Goods brought by foreign film producers directly and
exclusively used for mailing or recording motion picture films
on location in the Philippines, upon their identification,
examination and appraisal and the giving of a security in an
amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon,
conditioned for exportation thereof or payment of the
corresponding duties, taxes and other charges within three (3)
months from the date of acceptance of the goods declaration,
unless extended by the District Collector for another three (3)
months; photographic and cinematographic films,
underdeveloped, exposed outside the Philippines by resident
Filipino citizens or by producing companies of Philippine
registry where the principal actors and artists employed for the
production are Filipinos, upon affidavit by the importer and
identification that such exposed films are the same films
previously exported from the Philippines, As used in this
paragraph, the terms "actors" and "artists" include the persons
operating the photographic camera or other photographic and
sound recording apparatus by which the film is
made;cralawlawlibrary
(l) Importations for the official use of foreign embassies,
legations and other agencies of foreign
governments: Provided, That those foreign countries accord
like privileges to corresponding agencies of the Philippines.
Goods imported for the personal or family use of members and
attaches of foreign embassies, legations, consular officers and
other representatives of foreign governments: Provided,
however, That such privilege shall be accorded under special
agreements between, the Philippines and the countries which
they represent: Provided, further, That the privilege may be
granted only upon specific instructions of the Secretary of
Finance pursuant to an official request of the DFA on behalf of
members or attaches of foreign embassies, legations, consular
officers and other representatives of foreign governments.
(m) Imported goods donated to or, for the account of the
Philippine government or any duly registered relief
organization, not operated for profit, for free distribution
among the needy, upon certification by the DSWD or the
Department of Education (DepED), or the Department of
Health (DOH), as the case may be;cralawlawlibrary
(n) Containers, holders and other similar receptacles of any
material including kraft paper bags for locally manufactured
cement for export, including corrugated boxes for bananas,
mangoes, pineapples and other fresh fruits for export, except
other containers made of paper, paperboard and textile
fabrics, which are of such character as to be readily identifiable
and/or reusable for shipment or transportation of goods shall
be delivered to the importer thereof upon identification,
examination and appraisal and the giving of a security in an
amount equal to one hundred percent (100%) of the
ascertained duties, taxes and other charges thereon, within six
(6) months from the date of acceptance of the goods
declaration;cralawlawlibrary
(o) Supplies which are necessary for the reasonable
requirements of the vessel or aircraft in its voyage or flight
outside the Philippines, including goods transferred from a
bonded warehouse in any Customs District to any vessel or
aircraft engaged in foreign trade, for use or consumption of the
passengers or its crew on board such vessel or aircraft as sea
or air stores; or goods purchased abroad for sale on board a
vessel or aircraft as saloon stores or air store
supplies: Provided, That any surplus or excess of such vessel
or aircraft supplies arriving from foreign ports or airports shall
be dutiable;cralawlawlibrary
(p) Goods and salvage from, vessels recovered after a period
of two (2) years from the date of filing the marine protest or
the time when the vessel was wrecked or abandoned, or parts
of a foreign vessel or its equipment, wrecked or abandoned in
Philippine waters or elsewhere: Provided, That goods and
salvage recovered within the said period of two (2) years shall
be dutiable;cralawlawlibrary
(q) Coffins or urns containing human remains, bones or ashes,
used personal and household effects (not merchandise) of the
deceased person, except vehicles, the FCA value of which does
not exceed one hundred fifty thousand pesos (P15 0,000.00),
upon identification as such: Provided, That every three (3)
years after the effectivity of this Act, the value herein stated
shall be adjusted to its present value using the CPI as
published by the PSA;cralawlawlibrary
(r) Samples of the kind, in such quantity and of such
dimension or construction as to render them unsaleable or of
no commercial value; models not adapted for practical use;
and samples of medicines, properly marked "sample-sale
punishable by law", for the purpose of introducing new goods
in the Philippine market and imported only once in a quantity
sufficient for such purpose by a person duly registered and
identified to be engaged in that trade: Provided, That
importations under this subsection shall be previously
authorized by the Secretary of Finance: Provided,
however, That importation of sample medicines shall have
been previously authorized by the Secretary of Health, and
that such samples are new medicines not available in the
Philippines; Provided, further, That samples not previously
authorized or properly marked in accordance with this section
shall be levied the corresponding tariff duty.
21
Commercial samples, except those that are not readily and
easily identifiable as in the case of precious and semi-precious
stones, cut or uncut, and jewelry set with precious or semi-
precious stones, the value of any single importation of which
does not exceed FCA value of fifty thousand pesos
(P50.000.00) upon the giving of a security in an amount equal
to the ascertained duties, taxes and other charges thereon,
conditioned for the exportation of said samples within three (3)
months from the date of the acceptance of the goods
declaration or in default thereof, the payment of the
corresponding duties, taxes and other charges: Provided, That
if the FCA value of any single consignment of such commercial
samples exceeds fifty thousand pesos (P50,000.00), the
importer thereof may select any portion of the same not
exceeding the FCA value of fifty thousand pesos (P50.000.00)
for entry under the provision of this subsection, and the excess
of the consignment may be entered in bond, or for
consumption, as the importer may elect: Provided, further.
That every three (3) years after the effectivity of this Act, the
Secretary of Finance shall adjust the amount herein stated to
its present value using the CPI as published by the PSA. (s)
Animals, except race horses, and plants for scientific,
experimental propagation or breeding, and for other botanical,
zoological and national defense purposes: Provided, That no
live trees, shoots, plants, moss and bulbs, tubers and seeds for
propagation purposes may be imported under this section,
except by order of the government or other duly authorized
institutions: Provided, however, That the free entry of animals
for breeding purposes shall be restricted to animals of
recognized breed, duly registered in the record or registry
established for that breed, and certified as such by the Bureau
of Animal Industry (BAI):ChanRoblesVirtualawlibrary
Provided, further, That the certification of such record, and
pedigree of such animal duly authenticated by the proper
custodian of such record or registry, shall be submitted to the
District Collector, together with the affidavit of the owner or
importer that such animal is the animal described in said
certificate of record and pedigree: Provided, finally, That the
animals and plants are certified by the NEDA as necessary for
economic development;cralawlawlibrary
(t) Economic, technical, vocational, scientific, philosophical,
historical and cultural books or publications, and religious
books like Bibles, missals, prayer books, the Koran, Ahadith
and other religious books of similar nature and extracts
therefrom, hymnal and hymns for religious
uses: Provided, That those which may have already been
imported but are yet to be released by the Bureau at the
effectivity of this Act may still enjoy the privilege herein
provided upon certification by the DepED that such imported
books and/or publications are for economic, technical,
vocational, scientific, philosophical, historical or cultural
purposes or that the same are educational, scientific or cultural
materials covered by the International Agreement on
Importation of Educational Scientific and Cultural Materials
(IAESCM) signed by the President of the Philippines on August
2,1952, or other agreements binding upon the Philippines.
Educational, scientific and cultural materials covered by
international agreements or commitments binding upon the
Philippine government so certified by the DepED.
(u) Philippine goods previously exported from the Philippines
and returned without having been advanced in value or
improved in condition by any process of manufacturing or
other means, and upon which no drawback or bounty has been
allowed, including instruments and implements, tools of trade,
machinery and equipment, used abroad by Filipino citizens in
the pursuit of their business, occupation or profession; and
foreign goods previously imported when returned after having
been exported and loaned for use temporarily abroad solely for
exhibition, testing and experimentation, for scientific or
educational purposes; and foreign containers previously
imported which have been used in packing exported Philippine
goods and returned empty if imported by or for the account of
the person or institution who exported them from the
Philippines and not for sale, barter or hire subject to
identification: Provided, That Philippine goods falling under this
subsection upon which drawback or bounty have been, allowed
shall, upon reimportation thereof, be subject to a duty under
this subsection equal to the amount of such drawback or
bounty;cralawlawlibrary
(v) Aircraft, equipment and machinery, spare parts,
commissary and catering supplies, aviation gas, fuel and oil,
whether crude or refined except when directly or indirectly
used for domestic operations, and such other goods or supplies
imported by and for the use of scheduled airlines operating
under congressional franchise: Provided, That such goods or
supplies are not locally available in reasonable quantity, qualify
and price and are necessary or incidental to the proper
operation of the scheduled airline importing the
same;cralawlawlibrary
(w) Machineries, equipment, tools for production, plans to
convert mineral ores into saleable form, spare parts, supplies,
materials, accessories, explosives, chemicals, and
transportation and communications facilities imported by and
for the use of new mines and old mines which resume
operations, when certified to as such by the Secretary of the
Department of Environment and Natural Resources (DENR),
upon the recommendation of the Director of Mines and
Geosciences Bureau, for a period ending five (5) years from
the first date of actual commercial production of saleable
mineral products: Provided, That such goods are not locally
available in reasonable quantity, quality and price and are
necessary or incidental in the proper operation of the mine;
and aircrafts imported by agro-industrial companies to be used
by them in their agriculture and industrial operations or
activities, spare parts and accessories thereof, when certified
to as such by the Secretary of the Department of Agriculture
(DA) or the Secretary of the Department of Trade and Industry
(DTI), as the case may be;cralawlawlibrary
(x) Spare parts of vessels or aircraft of foreign registry
engaged in foreign trade when brought into the Philippines
exclusively as replacements or for the emergency repair
thereof, upon proof satisfactory to the District Collector that
such spare parts shall be utilized to secure the safety,
seaworthiness or airworthiness of the vessel or aircraft, to
enable it to continue its voyage or flight;cralawlawlibrary
(y) Goods exported from the Philippines for repair, processing
or reconditioning without having been substantially advanced
in value, and subsequently reimported in its original form and
in the same state: Provided, That in case the reimported goods
advanced in value, whether or not in their original state, the
value added shall be subject to the applicable duty rate of the
tariff heading of the reimported goods; and
(z) Trailer chassis when imported by shipping companies for
their exclusive use in handling containerized cargo, upon
posting a security in an amount equal to one hundred percent
(100%) of the ascertained duties, taxes and other charges due
thereon, to cover a period of one (1) year from the date of
acceptance of the entry, which period, for meritorious reasons,
may be extended by the Commissioner from year to year,
subject to the following conditions:ChanRoblesVirtualawlibrary
(1) That they shall be properly identified and registered with
the Land Transportation Office (LTO);cralawlawlibrary
22
(2) That they shall be subject to customs supervision fee to be
fixed by the District Collector and subject to the approval of
the Commissioner;cralawlawlibrary
(3) That they shall be deposited in the customs territory when
not in use; and
(4) That upon the expiration of the period prescribed above,
duties and taxes shall be paid unless otherwise reexported.
(aa) Any officer or employee of the DFA, including any attache,
civil or military or member of the staff assigned to a Philippine
diplomatic mission abroad by the Department or any similar
officer or employee of other departments assigned to any
Philippine consular office abroad, or any AFP military personnel
accorded assimilated diplomatic rank or on duty abroad who is
returning from a regular assignment abroad, for reassignment
to the home office, or who dies, resigns, or is retired from the
service, after the approval of this Act, shall be exempt from
the payment of all duties and taxes on personal and household
effects, including one (1) motor car which must have been
ordered or purchased prior to the receipt by the mission or
consulate of the order of recall, and which must be registered
in the name of the officer or employee: Provided, That this
exemption shall apply only to the value of the motor car and to
the aggregate assessed value of the personal and household
effects, the latter not to exceed thirty percent (30%) of the
total amount received by the officer or employee in salary and
allowances during the latest assignment abroad, but not to
exceed four (4) years: Provided, however, That this exemption
shall not be availed of more than once every four (4)
years: Provided, further, That the officer or employee
concerned must have served abroad for not less than two (2)
years.
The provisions of general and special laws, to the contrary
notwithstanding, including those granting franchises, there
shall be no exemption whatsoever from the payment of duties
except as provided for in this Act; those granted to
government agencies, instrumentalities or government-owned
or -controlled corporations (GOCCs) with existing contracts,
commitments, agreements, or obligations with foreign
countries requiring such exemption; those granted to
international institutions, associations or organizations entitled
to exemption pursuant to agreements or special laws; and
those that may be granted by the President upon prior
recommendation of the NEDA in the interest of national
economic development.
CHAPTER 2
CUSTOMS WAREHOUSES
Sec. 801. Establishment and Supervision of Customs Bonded
Warehouses. – When the business of the port requires such
facilities, the District Collector, subject to the approval of the
Commissioner, shall designate and establish warehouses for
use as public and private bonded warehouses, yards, or for
other special purposes. All such warehouses and premises shall
be subject to the supervision of the District Collector who shall
impose such conditions as may be deemed necessary for the
protection of the revenue, and of the goods stored therein. In
the exercise of the District Collector's supervisory functions
herein and in the Bureau's implementation of this chapter,
existing contracts of private operators with appropriate
government agency or regulator, such as, but not limited to,
the Philippine Ports Authority (PPA), Subic Bay Metropolitan
Authority (SBMA) and Phividec Industrial Authority (PIA) and
their respective authorities and powers already granted by law
pertinent to such contracts, shall not be impaired or adversely
affected.
Goods manufactured in whole or in part of imported materials,
and intended for exportation, may be made and manufactured
in a bonded manufacturing warehouse subject to the following
conditions:ChanRoblesVirtualawlibrary
(1) The manufacturer shall file sufficient security for the
faithful observance of all laws, rules and regulations applicable
thereto; (2) The application for the establishment of bonded
warehouses must be made in writing and filed with the
customs officer, describing the premises, the location, and
capacity of the same, and the purpose for which the building is
to be used, pursuant to Section 804 of this
Act;cralawlawlibrary
(3) From the receipt of the application, the customs officer
shall examine the premises, evaluate its location, construction,
and means provided for the safekeeping of the
goods;cralawlawlibrary
(4) The customs officer may authorize the establishment of the
customs bonded warehouse, and accept a bond for its
operation and maintenance if the applicant was compliant with
the prescribed requirements; and
(5) The operator of the bonded warehouse shall pay an annual
supervision fee in an amount to be fixed by the Commissioner.
Sec. 802. Types of Customs Bonded Warehouses (CBWs). –
Customs bonded warehouses may be classified as either
manufacturing or nonmanufacturing.
Manufacturing customs bonded warehouse may be of the
following types: (a) miscellaneous customs bonded
warehouse; (b) customs common bonded warehouse; or (c)
industry-specific bonded warehouse.
Nonmanufacturing customs bonded warehouse include: (a)
public bonded warehouse; (b) private bonded warehouse; or
(c) other customs facilities.
Sec. 803. Types of Customs Facilities and Warehouses
(CFWs). — Customs facilities and warehouses shall
include:ChanRoblesVirtualawlibrary
(a) Container yard;cralawlawlibrary
(b) Container freight station;cralawlawlibrary
(c) Seaport warehouses; and
(d) Airport warehouses.
Subject to consultation with the NEDA and the DTI, and based
on prevailing economic circumstances, the Secretary of
Finance may, upon the recommendation of the Commissioner,
create or dissolve certain types of warehouses.
Sec. 804. Application for Operation of a Customs Warehouse. –
Application for the establishment of CBW and CFW shall be
filed with the District Collector where the CBW or CFW is
located, describing the premises, location, capacity and
purpose thereof.
Upon receipt of such application, the District Collector shall
examine the premises of such proposed warehouse,
particularly its location, construction and storage facilities. The
District Collector, with the approval of the Commissioner, may
authorize the establishment of customs warehouses, and
23
accept the required security for its operation and maintenance.
The operator of such CBW and CFW shall pay an annual
supervision fee, as determined by the Commissioner.
Sec. 805. Responsibility of Operators. – The operator of a CBW
or CFW shall comply with the customs requirements on
establishment, security, suitability and management, including
stock-keeping and accounting- of the goods, of the CBW or
CFW.
Upon lawful demand, the operator of a CBW or CFW shall allow
authorized representatives of the Bureau access to the
premises at a reasonable time, and to all documents, books
and records of accounts pertaining to the operations of the
CBW or CFW.
In case of loss of the goods stored in a CBW or CFW due to
operator's gross negligence or willful misconduct, the operator
shall be liable for the payment of duties and taxes due thereof.
The government assumes no legal responsibility over the
safekeeping of goods stored in any customs warehouse, yard
or premises.
Sec. 806. Customs Control Over CBWs and CFWs. – The
Bureau shall, for customs purposes, exercise control over,
direct and manage CBWs and CFWs pursuant to Section 303 of
this Act and likewise over the goods thereat pursuant to
Section 301 of this Act: Provided, That the Bureau shall not be
liable for any loss or damage of the goods stored for
safekeeping in any CBW, CFW, yard or premises.
Sec. 807. Discontinuance of CBW and CFW. – The use of any
CBW and CFW may be discontinued by the District Collector
when conditions so warrant, or upon receipt of a written
request from the operator thereof: Provided, That all the
requirements of the laws and regulations have been complied
with by said operator. Where dutiable goods are stored in such
premises, the same must be removed at the risk and expense
of the operator: Provided, however, That the premises shall
not be relinquished, and its use shall not be discontinued until
after a careful examination of the account of the warehouse
shall have been made. Discontinuance of the use of any
warehouse shall be effective upon approval thereof by the
District Collector who shall, within ten (10) days, inform the
Commissioner of such action in writing.
Notice of discontinuance made by the operator shall not result
in the discharge from any duties, taxes, fees and other charges
imposed on dutiable goods in said warehouse.
Sec. 808. Warehousing Security on Goods Stored in CBWs. –
For goods declared in the entry for warehousing in CBWs, the
District Collector shall require the importer to post a sufficient
security equivalent to the computed duties, taxes and other
charges, conditioned upon the withdrawal of the goods within
the period prescribed by Section 811 of this Act or the
payment of duties, taxes and other charges and compliance
with all importation requirements.
Sec. 809. Withdrawal of Goods from CBWs. – – Imported
goods shall be withdrawn from the CBWs when the necessary
withdrawal permit has been filed, together with any related
document required by any provision of this Act and other
regulations.
Goods entered under sufficient security as provided in Section
1507 of this Act may be withdrawn at any time for
consumption, transit, or exportation. The withdrawal must be
made by the CBW operator or its duly authorized
representative.
Sec. 810. Release of Goods from CFWs. – Imported goods shall
be released when the goods declaration is electronically
lodged, together with any related document required by any
provision of this Act and other regulations. All goods entered
into the CFWs shall be subject to the filing of a goods
declaration within the period specified under Section 407 of
this Act.
Sec. 811. Period of Storage in CBWs. – Goods entered for
warehousing may remain in a CBW for a maximum period of
one (1) year from the time of its arrival thereat. For perishable
goods, the storage period shall be three (3) months from the
date of arrival, extendable for valid reasons, and upon written
request, to another three (3) months. Goods not withdrawn
after the expiration of the prescribed period shall be deemed
as abandoned, as provided under Section 1129 of this Act.
The Commissioner shall, in consultation with the Secretary of
Trade and Industry, establish a reasonable storage period limit
beyond one (1) year for bonded goods for manufacturing and
intended for exp ort, the processing into finished products of
which requires a longer period based on industry standard and
practice, subject to the approval of the Secretary of Finance.
Sec. 812. Exemption from Duty of Goods in CBWs. – Goods
duly entered for warehousing in CBWs shall be exempt from
duty and tax within the allowed period for storage unless
withdrawn for consumption, exportation or transit to a free
zone or another CBW, in which case, such withdrawal will be
subject to the applicable rules and regulations on the
liquidation of the warehousing entry.
Sec. 813. Records to be Kept by CBW Operators. – An account
shall be kept by the Bureau of all goods delivered to a CBW,
and a report shall be made by the CBW operator containing a
detailed statement of all imported goods entered and
withdrawn from the CBW. The Bureau shall specify the format
of the report and may require electronic submission.
All documents, books, and records of accounts concerning the
operation of any CBW shall, upon demand, be made available
to the District Collector or the representative of the District
Collector for examination or audit. For record purposes, all
documents shall be kept for three (3) years.
CHAPTER 3
FREE ZONES
Sec. 814. When Goods are Admitted and Withdrawn. –
Imported goods shall be admitted into a free zone when the
goods declaration, together with required documents as
required by existing laws and regulations, are electronically
lodged with the Bureau and other relevant government
authorities at the time of admission.
Imported goods shall be withdrawn from the free zone for
entry to the customs territory when the goods declaration is
electronically lodged, together with required documents at the
time of the withdrawal from the free zone.
Sec. 815. Exemption from Duty and Tax of Goods in Free
Zones. – Unless otherwise provided by law and in accordance
with the respective laws, rules and regulations of the free zone
authorities, goods admitted into a free zone shall not be
subject to duty and tax.
Sec. 816. Movement of Goods into and from Free Zones. – The
entry of goods into a free zone, whether directly or through
the customs territory, shall be covered by the necessary goods
24
declaration for admission or transit. Withdrawal from the free
zone into the customs territory shall be covered by the
necessary goods declaration for consumption or warehousing.
Transfer of goods from one free zone into another free zone
shall likewise be covered by the necessary transit permit.
The implementing rules and regulations on the transit of goods
admitted into, exported from, withdrawn into the customs
territory, and moved between free zones shall be formulated
and issued jointly by the Bureau and the free zone authorities.
Sec. 817. Coordination With Free Zone Authority. – To ensure
compliance with customs laws and regulations, the Bureau
shall coordinate with the governing authority of the free zone.
CHAPTER4
STORES
Sec. 818. Stores for Consumption. – Stores for consumption
shall include:ChanRoblesVirtualawlibrary
(a) Goods intended for use by the passengers and the crew on
board vessels, aircrafts, or trains, whether or not sold; and
(b) Goods necessary for the operation and maintenance of
vessels, aircrafts, or trains including fuel and lubricants but
excluding spare parts and equipment which are either on board
upon arrival or are taken on board during the stay in the
customs territory of vessels, aircrafts, or trains used, or
intended to be used, in international traffic for the transport of
persons for remuneration or for the industrial or commercial
transport of goods, whether or not for remuneration.
Sec. 819. Stores to be Taken Away. – For purposes of this
chapter, "stores to be taken away" means goods for sale to the
passengers and the crew of vessels, aircrafts, or trains with a
view to being landed, which are either on board upon arrival or
are taken on board during the stay in the customs territory of
vessels, aircrafts, or trains used, or intended to be used, in
international traffic for the transport of persons for
remuneration or for the industrial or commercial transport of
goods, whether or not for remuneration.
Sec. 820. Exemption from Duties and Taxes of Stores. –
Customs treatment of stores should apply uniformly,
regardless of the country of registration or ownership of
vessels, aircraft, or trains. Stores which are carried in a vessel,
aircraft, or train arriving in the customs territory shall be
exempted from import duties and taxes provided that they
remain on board. Stores for consumption by the passengers
and the crew imported as provisions on international express
vessels, aircrafts, or trains shall be exempted from import
duties and taxes: Provided, That:ChanRoblesVirtualawlibrary
(a) Such goods are purchased only in the countries crossed by
the international vessels and aircrafts in question; and
(b) Any duties and taxes chargeable on such goods in the
country where they were purchased are paid.
Stores necessary for the operation and maintenance of
vessels, aircrafts, or trains which are on board these means of
transport shall be exempted from import duties and
taxes: Provided, further, That they remain on board while
these means of transport are in the customs territory. The
Bureau shall allow the issue of stores for use on board during
the stay of a vessel
in the customs territory in such quantities as the customs
authority deems reasonable with due regard to the number of
the passengers and the crew and to the length of the stay of
the vessel in the customs territory. The Bureau should allow
the issue of stores for use on board by the crew while the
vessel is undergoing repairs in a dock or shipyard: Provided,
finally, That the duration of stay in a dock or shipyard is
considered to be reasonable.
When an aircraft is to land at one or more airports in the
customs territory, the Bureau should allow the issuance of
stores for consumption on board both during the stay of the
aircraft at such intermediate airports and during its flight
between such airports.
The Bureau shall require a carrier to take appropriate
measures to prevent any unauthorized use of the stores
including sealing of the stores, when necessary. It shall require
the removal of stores from the vessel, aircraft, or trains for
storage elsewhere during its stay in the customs territory only
when the Bureau considers it necessary.
Vessels, aircrafts, or trains which depart for an ultimate foreign
destination shall be entitled to take on board, exempted from
duties and taxes, the following:ChanRoblesVirtualawlibrary
(1) Stores in such quantities as the Bureau deems reasonable
with due regard to the number of the passengers and the
crew, to the length of the voyage or Sight, and to any quantity
of such stores already on board; and
(2) Stores necessary for the operation and maintenance of a
vessel, aircraft, or train, in such quantities as are deemed
reasonable for operation and maintenance during the voyage
or flight, after due regard of the quantity of such stores
already on board.
Replenishment of stores that are exempted from duties and
taxes shall be allowed for vessels, aircrafts, or trains which
have arrived in the customs territory, and which need to
replenish their stores for the journey to their final destination
in the customs territory, subject to the same conditions
provided in this Chapter. Sec. 821. Goods Declaration for
Stores. – When a declaration concerning stores on board
vessels arriving in the customs territory is required by the
Bureau, the information required shall be kept to the minimum
and as may be necessary for customs control.
The quantities of stores which are supplied to vessels during its
stay in the customs territory should be recorded on the
required goods declaration concerning stores.
The Bureau shall not require the presentation of a separate
declaration of remaining stores on board a vessel, an aircraft
or a train. No separate declaration concerning stores should be
required upon departure of vessels from the customs territory.
When a declaration is required concerning stores taken on
board the vessels or aircrafts upon departure from the customs
territory, the information required shall be kept to the
minimum as may be necessary for customs control.
When a vessel, aircraft, or train arrives in the customs
territory, stores on board shall:ChanRoblesVirtualawlibrary
(a) Be cleared for consumption or placed under another
customs procedure, subject to compliance with the conditions
and formalities applicable in each case; or
(b) Subject to prior authorization by the Bureau, be
transferred respectively to another vessel, aircraft, or train
assigned to an international route.
25
TITLE IX
DUTY DRAWBACK AND REFUND
CHAPTER 1
DUTY DRAWBACK
Sec. 900. Basis of Duty Drawback. – (A) On Fuel Used for
Propulsion of Vessels. – On all fuel imported into the
Philippines used for propulsion of vessels engaged in trade with
foreign countries, or in the coastwise trade, a refund or tax
credit shall be allowed not exceeding ninety-nine percent
(99%) of the duty imposed by law upon such fuel, which shall
be paid or credited under such rules and regulations as may be
prescribed by the Commissioner with the approval of the
Secretary of Finance.
(B) On Petroleum Oils and Oils Obtained from Bituminous
Minerals, Crude, Eventually Used for Generation of Electric
Power and for the Manufacture of City Gas. – On petroleum
oils and oils obtained from bituminous materials, crude oil
imported by nonelectric utilities, sold directly or indirectly, in
the same form or after processing, to electric utilities for the
generation of electric power and for the manufacture of city
gas, a refund or tax credit shall be allowed not exceeding fifty
percent (50%) of the duty imposed by law upon such oils,
which shall be paid or credited under such rules and
regulations as may be prescribed by the Commissioner with
the approval of the Secretary of Finance.
(C) On Goods Made from Imported Materials. – Upon
exportation of goods manufactured or produced in the
Philippines, including the packing, covering, putting up,
marking or labeling thereof either in whole or in part of the
imported materials for which duties have been paid, a refund
or tax credit shall be allowed for the duties paid on the
imported materials so used including the packing, covering,
putting up, marking or labeling thereof, subject to the
following conditions:ChanRoblesVirtualawlibrary
(1) The actual use of the imported materials in the production
or manufacture of the goods exported with their quantity,
value, and amount of duties paid thereon, should be
established satisfactorily;cralawlawlibrary
(2) The duties refunded or credited shall not exceed one
hundred percent (100%) of duties paid on the imported
materials used;cralawlawlibrary
(3) There is no determination by the NEDA of the requirement
for certification on nonavailability of locally-produced or
manufactured competitive substitutes for the imported
materials used at the time of importation;cralawlawlibrary
(4) The exportation shall be made within one (1) year after the
importation of materials used and claim of refund or tax credit
shall be filed within six (6) months from the date of
exportation; and
(5) When two or more products result from the use of the
same imported materials, an apportionment shall be made on
its equitable basis.
Sec. 901. Payment of Drawbacks. – Eligible claims for refund
or tax credit shall be paid or granted by the Bureau to
claimants within sixty (60) days after receipt of properly
accomplished claims: Provided, That a registered enterprise
under Republic Act No. 5186, otherwise known as the
"Investment Incentives Act", or Republic Act No. 6135,
otherwise known as the "Export Incentives Act of 1970", which
has previously enjoyed tax credits based on customs duties
paid on imported raw materials and supplies, shall not be
entitled to a drawback under this section with respect to the
same importation subsequently processed and reexported.
The Secretary of Finance may, upon the recommendation of
the Commissioner, promulgate rules and regulations allowing
partial payments of drawbacks pursuant to this section,
Sec. 902. Prescription of Drawback Claim. – A claim and
application for a drawback shall prescribe if it is not filed within
one (1) year from the date of importation in case of Section
900, paragraphs (A) and (B) and within one (1) year from the
date of exportation in the case of Section 900, paragraph (C),
subject to such rules and regulations as may be issued by the
Commissioner, upon approval of the Secretary of Finance.
CHAPTER 2
REFUND AND ABATEMENT
Sec. 903. Refund of Duties and Taxes. – Refund shall be
granted where it is established that duties and taxes have
been overcharged as a result of an error in the assessment or
goods declaration.
Where permission is given by the Bureau for goods originally
declared for a customs procedure with payment of duties and
taxes to be placed under another customs procedure, a refund
shall be made of any duties and taxes charged in excess of the
amount due under the new procedure, subject to such
regulation issued for the purpose.
A refund shall not be granted if the amount of duties and taxes
involved is less than five thousand pesos
(P5,000.00): Provided, That the Secretary of Finance, in
consultation with the Commissioner, may adjust the minimum
amount specified in this Act, taking into account the CPI as
published by the PSA.
Sec. 904. Abatement of Duties and Taxes. – When goods have
not yet been released for consumption or have been placed
under another customs procedure, provided that no other
offense or violation has been committed, the declarant shall
neither be required to pay the duties and taxes nor be entitled
to refund thereof in any of the following
cases:ChanRoblesVirtualawlibrary
(a) When, at the request of the declarant, the goods are
abandoned, or as determined by the Bureau, the goods are
destroyed or rendered commercially valueless while under
customs control. Any cost herein incurred shall be borne by the
declarant;cralawlawlibrary
(b) When goods are destroyed or irrecoverably lost by accident
or force majeure, the remaining waste or scrap after
destruction, if taken into consumption, shall be subject to the
duties and taxes that would be applicable on such waste or
scrap if imported in same state; and
(c) When there are shortages due to the nature of the goods.
Sec. 905. Abatement for Damage Incurred During Voyage. –
Except as otherwise provided, no abatement of duties shall be
made on account of damage incurred or deterioration suffered
during the voyage of importation; and duties will be assessed
on the actual quantity imported as determined by the customs
officers concerned.
26
Sec. 906. Abatement or Refund of Duty on Missing Package. –
When any package appearing on the manifest or bill of lading
or airway bill is missing, an abatement or refund of the duty
shall he made if it is certified by the importer or consignee,
under pain of penalty for falsification or perjury, and upon
production of proof satisfactory to the Collector concerned,
that the package in question has not been unlawfully imported
into the Philippines.
Sec. 907. Abatement or Refund for Deficiency in Contents of
Packages. – If, upon opening of any package, a deficiency in
the quantity of the goods is found to exist based upon the
invoice, such deficiency shall be certified, under pain of penalty
for falsification or perjury, by the customs officers concerned
and upon the production of proof showing that the shortage
occurred before the arrival of the goods in the Philippines.
Upon sufficient proof thereof, the proper abatement or refund
of the duty shall be made.
Sec. 908. Abatement or Refund of Duties on Goods Lost or
Destroyed After Arrival. – The Bureau may abate or refund the
amount of duties accruing or paid on any goods that have been
lost due to injury, theft, destruction through fire or through
any other causes, upon satisfactory proof of the same, under
any of the following circumstances:ChanRoblesVirtualawlibrary
(a) While 'within the territory of any port of entry, prior to
unloading' under the Bureau's supervision;cralawlawlibrary
(b) While remaining in customs custody after
unloading;cralawlawlibrary
(c) While in transit from the port of entry to any port in the
Philippines; and
(d) While released under sufficient security for export except in
case of loss by theft.
Sec. 909. Abatement and Refund of Defective Goods. – Under
conditions to be set by the Commissioner, and with the
approval of the Secretary of Finance, an abatement and refund
shall be granted on imported or exported goods which are
found defective or otherwise not in accordance with, the
agreed specifications at the time of importation or exportation
and are returned either to the supplier or to another person
designated by the supplier, subject to the following
conditions:ChanRoblesVirtualawlibrary
(a) The goods have not been worked, repaired, or used in the
country of importation, and are reexported within, a
reasonable time; and
(b) The goods have not been worked, repaired, or used in the
country to which, they were exported, and are reimported
within a reasonable time.
Use of the goods shall, however, not hinder the refund if such
use was indispensable to discover the defects or other
circumstances which caused the reexportation or reimportation
of the goods.
As an alternative to reexportation or reimportation, the goods
may be expressly abandoned or destroyed or rendered
commercially valueless under customs control as the Bureau
may decide. In such, case, the importer shall not be entitled to
an abatement or a refund if it does not defray the costs of such
abandonment, destruction, or rendition.
Sec. 910. Abatement of Duty on Dead or Injured Animals. –
Where it is certified, under pain of penalty for falsification or
perjury, and upon production of proof satisfactory to the
Bureau that an animal subject of importation dies or suffers
injury before arrival, or while in customs custody, the duty due
thereon shall be abated provided that its carcass on board or
in customs custody is removed in the manner required by the
Bureau and at the expense of the importer.
Sec. 911. Investigation Required in Case of Abatements and
Refunds. – The Customs Officer concerned shall, in all cases of
abatement or refund of duties, submit an examination report
as to any fact discovered which indicates any discrepancy and
cause the corresponding adjustment on the goods declaration.
Sec. 912. Refund Arising from Correction of Errors. – Manifest
clerical errors made on an invoice or entry, errors in return of
weight, measure and gauge, when duly certified under
penalties of falsification or perjury by the surveyor or
examining officer when there are such officers at the port, and
errors in the distribution of charges on invoices not involving
any question of law and certified under penalties of falsification
or perjury by the examining customs officer, may be corrected
in the computation of duties, if such errors are discovered
before the payments of duties, or if discovered within one (1)
year after release from customs custody of imported goods
upon written request and notice of error from the importer, or
upon statement of error certified by the District Collector.
For the purpose of correcting errors specified in the next
preceding paragraph, the Bureau is authorized to make
refunds within the statutory time limit.
Sec. 913. Claims for Refund. – All claims and application for
refund of duties and taxes shall be made in writing and filed
with the Bureau within twelve (12) months from the date of
payment of duties and taxes.
If, as a result of the refund of duties, a corresponding refund
of internal revenue taxes on the same importation becomes
due, the Bureau shall cause the refund of internal revenue
taxes in favor of the importer after issuance of a certification
from the Commissioner of Internal Revenue, when applicable.
The importer may file an appeal of a denial of a claim for
refund or abatement, whether it is a full or partial denial, with
the Commissioner within thirty (30) days from the date of the
receipt of the denial. The Commissioner shall render a
decision within thirty (30) days from the receipt of all the
necessary documents supporting the application. Within thirty
(30) days from receipt of the decision of the Commissioner,
the case may also be appealed to the CTA.
Notwithstanding the provisions in the preceding paragraphs,
the filing of claims for refund of national internal revenue taxes
shall be governed by the provisions provided under the NIRC
of 1997, as amended.
TITLE X
POST CLEARANCE AUDIT
Sec. 1000. Audit and Examination of Records. – Within three
(3) years from the date of final payment of duties and taxes or
customs clearance, as the case may be, the Bureau may
conduct an audit examination, inspection, verification, and
investigation of records pertaining to any goods declaration,
which shall include statements, declarations, documents, and
electronically generated or machine readable data, for the
purpose of ascertaining the correctness of the goods
27
declaration and determining the liability of the importer for
duties, taxes and other charges, including any fine or penalty,
to ensure compliance with this Act.
Sec. 1001. Scope of the Audit. – The audit of importers shall
be conducted when firms are selected by a computer-aided
risk management system, the parameters of which are to be
based on objective and quantifiable data, subject to the
approval of the Secretary of Finance upon recommendation of
the Commissioner. The criteria for selecting firms to be audited
shall include:ChanRoblesVirtualawlibrary
(a) Relative magnitude of customs revenue to be generated
from the firm; (b) The rates of duties of the firm's
imports;cralawlawlibrary
(c) The compliance track records of the firm; and
(d) An assessment of the risk to revenue of the firm's import
activities.
Sec. 1002. Access to Records. – Any authorized officer of the
Bureau shall be given by the importer and customs broker full
and free access to the premises where the records are kept, to
conduct audit examination, inspection, verification, and
investigation of those records relevant to such investigation or
inquiry.
A copy of any document certified by or on behalf of the
importer is admissible in evidence in all courts as if it were the
original copy.
A customs officer is not entitled to enter the premises under
this section unless, before so doing, the officer produces to the
person occupying or apparently in charge of the premises
written evidence of the fact of being duly authorized. The
person occupying or apparently in charge of the premises
entered by an officer shall provide the officer with all
reasonable facilities and assistance for the effective exercise of
the officer's authority under this section.
Unless otherwise provided herein or in other provisions of law,
the Bureau may, in case of disobedience, invoke the aid of the
proper regional trial court within whose jurisdiction the matter
falls. The court may punish contumacy or refusal as contempt.
In addition, the fact that the importer or customs broker
denies the authorized customs officer full and free access to
importation records during the conduct of a post clearance
audit shall create a presumption of inaccuracy in the
transaction value declared for their imported goods and
constitute grounds for the Bureau to conduct a reassessment
of such goods.
In addition, the imposition of the appropriate criminal
sanctions provided under this Act and other administrative
sanctions may be concurrently invoked against contumacious
importers, including the suspension of the delivery or release
of their imported goods.
Sec. 1003. Requirement to Keep Records. – (a) All importers
are required to keep at their principal place of business, in the
manner prescribed by regulations to be issued by the
Commissioner and for a period of three (3) years from the
date of final payment of duties and taxes or customs
clearance, as the case may be, all records pertaining to the
ordinary course of business and to any activity or information
contained in the records required by this title in connection
with any such activity.
For purposes of the post clearance audit and Section 1005 of
this Act, the term importer shall include the
following:ChanRoblesVirtualawlibrary
(1) Importer-of-record or consignee, owner or declarant, or a
party who:ChanRoblesVirtualawlibrary
(i) Imports goods into the Philippines or withdraws such goods
into the Philippine customs territory for consumption or
warehousing; files a claim for refund or drawback; or
transports or stores such goods carried or held under security;
or
(ii) Knowingly causes the importation or transportation or
storage of imported goods referred to above, or the filing of
refund or drawback claim.
(2) An agent of any party described in paragraph (1); or
(3) A person whose activities require the filing of a goods
declaration.
A person ordering imported goods from a local importer or
supplier in a domestic transaction shall be exempted from the
requirements imposed by this section
unless:ChanRoblesVirtualawlibrary
(1) The terms and conditions of the importation are controlled
by the person placing the order; or
(2) The circumstances and nature of the relationship between
the person placing the order and the importer or supplier are
such that the former may be considered as the beneficial or
true owner of the imported goods; or
(3) The person placing the order had prior knowledge that they
will be used in the manufacture or production of the imported
goods.
(b) All parties engaged in customs clearance and processing
are required to keep at their principal place of business, in the
manner prescribed by regulations to be issued by the
Commissioner and for a period of three (3) years from the
date of filing of the goods declaration, copies of the
abovementioned records covering the transactions handled.
(c) Locators or persons authorized to bring imported goods
into free zones, such as the special economic zones and free
ports, are required to keep subject-records of all its activities,
including in whole or in part, records on imported goods
withdrawn from said zones into the customs territory for a
period of three (3) years from the date of filing of the goods
declaration.
Failure to keep the records required by this Act shall constitute
a waiver of this right to contest the results of the audit based
on records kept by the Bureau.
Sec. 1004. Power of the Commissioner to Obtain Information
and Issue Summons. – For the effective implementation of the
post clearance audit functions of the Bureau, the
Commissioner is hereby authorized
to:ChanRoblesVirtualawlibrary
(a) Obtain on a regular basis from any person, in addition to
the person who is the subject of a post clearance audit or
investigation, or from any office or officer of the national and
local governments, government agencies and
instrumentalities, including the BSP and GOCCs, any
information such as costs and "volume of production, receipts
or sales and gross income of taxpayers, and the names,
addresses, and financial statements of corporations, regional
operating headquarters of multinational companies, joint
28
accounts, associations, joint ventures or consortia and
registered partnerships, and their members, whose business
operations or activities are directly or indirectly involved in the
importation or exportation of imported goods or products
manufactured from imported component
materials;cralawlawlibrary
(b) Summon the person liable for duties and taxes or required
to file goods declaration, or any officer or employee of such
person, or any person having possession, custody, or care of
the books of accounts and other accounting records containing
entries relating to the business of the person liable for duties
and taxes, or any other person, to appear before the
Commissioner or the duly authorized representative at a time
and place specified in the summons and to produce such
books, papers, records, or other data, and to give
testimony;cralawlawlibrary
(c) Take such, testimony of the person concerned, under oath,
as may be relevant or material to such inquiry; or
(d) Obtain information from banks or other financial
institutions on commercial documents and records pertaining
specifically to payments relevant to import transaction.
The provisions of the foregoing paragraphs notwithstanding,
nothing in this section shall be construed as granting the
Commissioner the authority to inquire into bank deposits of
persons or entities mentioned in this Title.
Sec. 1005. Failure to Pay Correct Duties and Taxes on
Imported Goods. – Any person who, after being subjected to
post clearance audit and examination as provided in Section
1000 of this Act, is found to have incurred deficiencies in.
duties and taxes paid for imported goods, shall be penalized
according to two (2) degrees of culpability subject to any
mitigating, aggravating, or extraordinary factors that are
clearly established by available evidence as described
hereunder:ChanRoblesVirtualawlibrary
(a) Negligence. – When a deficiency results from an offender's
failure, through an act or acts of omission or commission, to
exercise reasonable care and competence in ensuring that a
statement made is correct, the offender shall be charged for
committing negligence, and, if found guilty shall be penalized
with a fine equivalent to one hundred twenty-five percent
(125%) of the revenue loss: Provided, That subject to Section
108 of this Act, no substantial penalty shall be imposed on an
inadvertent error amounting to simple negligence, as defined
by rules promulgated by the Secretary of Finance, upon
recommendation of the Commissioner;cralawlawlibrary
(b) Fraud. – When the material false statement or act in
connection with the transaction was committed or omitted
knowingly, voluntarily and intentionally, as established by clear
and convincing evidence, the offender who is charged for
committing fraud and is found guilty thereof, shall be penalized
with a fine equivalent to six (6) times of the revenue loss
and/or imprisonment of not less than two (2) years, but not
more than eight (8) years.
The decision of the Commissioner, upon proper hearing, to
impose penalties as prescribed in this section may be appealed
in accordance with Section 1104 of this Act.
Sec. 1006. Records to be Kept by the Bureau. – The Bureau
shall keep a database of importer and broker profiles which
shall include a record of audit results and the following
information and papers:ChanRoblesVirtualawlibrary
(a) Articles of Incorporation;cralawlawlibrary

(b) The company structure, which shall include, but not limited
to, incorporators and board of directors key officers, and
organizational structure;cralawlawlibrary
(c) Key importations;cralawlawlibrary
(d) Privileges enjoyed;cralawlawlibrary
(e) Penalties; and (1) Risk categories.
The Bureau shall furnish the BIR and the DOF a copy of the
final audit results within thirty (30) days from the issuance
thereof.
TITLE XI
ADMINISTRATIVE AND JUDICIAL PROCEDURES
CHAPTER 1
ADVANCE RULING AND DISPUTE SETTLEMENT
Sec. 1100. Classification Ruling. – An importer or exporter may
file a written application for an advance ruling on the tariff
classification of goods with the Commission. The Commission
shall render a ruling within thirty (30) days from, receipt of a
properly documented application.
When a declared tariff classification of goods, not subject of a
pending application for advance ruling, is in dispute, the
importer, exporter, or the Bureau shall submit the matter to
the Commission for a ruling, without prejudice to the
application of Section 1106 of this Act on
"protest": Provided, That such rulings of the Commission on
commodity classification shall be binding upon the Bureau,
unless the Secretary of Finance shall rule otherwise.
Sec. 1101. Valuation Ruling. – An importer or exporter may file
a written application for an advance valuation ruling on the
proper application of a specific method on customs valuation of
specific goods as prescribed in Title VII, Chapter 1 of this Act.
The application for a valuation ruling shall be filed with the
Commissioner who shall issue a ruling within thirty (30) days
from submission of the application form and supporting
documents as may be required by rules and regulations.
When the valuation method of goods not subject of an
application for advance valuation ruling or the declared
customs value is in dispute, the matter shall be resolved in
accordance with Section 1106 of this Act on "protest".
Sec. 1102. Ruling on the Rules of Origin. – An importer or
exporter may file a written application for a ruling on whether
the goods qualify as originating under the rules of origin of the
applicable preferential trade agreement. The application for an
advance ruling on origin shall be filed with the Commissioner
who shall act on the application within thirty (30) days from
receipt of the application and supporting documents as may be
required by rules and regulations.
When the declared origin of the goods, not subject of a request
for advance ruling on origin, is in dispute, the matter shall be
resolved in accordance with Section 1106 of this Act on
"protest".
Sec. 1103. Conditions for Application and Effect of Advance
Ruling. – An application for an advance ruling shall cover only
one (1) product or item. The application for advance ruling
29
shall be filed at least ninety (90) days before the importation
or exportation of the product or item, as the case may be.
Sec. 1104. Administrative and Judicial Appeals. – An aggrieved
party may, within thirty (30) days from receipt of an adverse
ruling or decision, appeal the same to the CTA without
prejudice to the authority of the Secretary of Finance to review
decisions adverse to the government in accordance with
Sections 1127 and 1128 of this Act, as the case may be.
SEC, 1105. Implementing Rules and Regulations. – The
Secretary of Finance, upon the recommendation of the Bureau
and the Commission, shall promulgate rules and regulations to
implement the preceding provisions on advance ruling.
CHAPTER 2
PROTEST
Sec. 1106. Protest – When a ruling or decision of the District
Collector or customs officer involving goods with valuation,
rules of origin, and other customs issues is made, except the
fixing of fines in seizure cases, the party adversely affected
may appeal by way of protest against such ruling or decision
by presenting to the Commissioner at the time when payment
of the amount claimed to be due the government is made, or
within fifteen (15) days thereafter, a written protest setting
forth the objection to the ruling or decision in question and the
reasons therefore.
Subject to the approval of the Secretary of Finance, the
Commissioner shall provide such rules and regulations as to
the requirement for payment or nonpayment of the disputed
amount and in case of nonpayment, the release of the
importation under protest upon posting of sufficient security.
Sec. 1107. Protest Exclusive Remedy in Protestable Case. – In
all cases subject to protest, the interested party who desires to
have the action of the District Collector reviewed, shall file a
protest as provided in Section 1106 of this Act, otherwise the
action of the District Collector shall be final and conclusive.
Sec. 1108. Form and Scope of Protest. – A protest shall be
filed in accordance with the prescribed rules and regulations
promulgated under this section. It shall specify the particular
decision or ruling of the District Collector for which protest is
being made, and shall indicate the particular ground or
grounds upon which the protesting party bases the claim for
relief. The scope of a protest shall be limited to the particular
goods subject of a goods declaration, but any number of issues
may be raised in a protest with reference to the goods
declaration constituting the subject matter of the protest.
Sec. 1109. Samples to be Furnished by Protesting Parties. – If
the nature of the goods permit, importers filing protests
involving questions of fact must, upon demand, present to the
Commissioner samples of the goods which are the subject
matter of the protest. The samples of the goods shall be
verified by the customs officer who made the classification,
against which the protests are filed.
Sec. 1110. Decision in Protest. – When a protest is filed in
proper form, the Commissioner shall render a decision within
thirty (30) days from receipt of the protest. In case the protest
is sustained, in whole or in part, the appropriate order shall be
made, and the entry reassessed, if necessary.
 CHAPTER 3
ALERT ORDERS
Sec. 1111. Alert Orders. – Alert orders are written orders
issued by customs officers as authorized by the Commissioner
on the basis of derogatory information regarding possible
noncompliance with this Act. An alert order will result in the
suspension of the processing of the goods declaration and the
conduct of physical or nonintrusive inspection of the goods
within forty-eight (48) hours from issuance of the order. Within
forty-eight (48) hours or, in the case of perishable goods,
within twenty-four (24) hours from inspection, the alerting
officer shall recommend the continuance of processing of
goods in ease of a negative finding, or issuance of a warrant of
seizure and detention if a discrepancy between the declaration
and actual goods is found. The Bureau's information system
shall immediately reflect the imposition or lifting of an alert
order.
Derogatory information shall indicate the violations and other
necessary specifics thereof. For this purpose, the following
shall not be considered derogatory
information:ChanRoblesVirtualawlibrary
(a) General allegations of undervaluation;cralawlawlibrary
(b) General allegations of misclassification without providing
the appropriate tariff heading and duty of the shipment to be
alerted;cralawlawlibrary
(c) General allegations of over-quantity without indicating the
source of information supporting the
allegation;cralawlawlibrary
(d) General allegations of misdeclaration in the entry without
indicating the suspected actual contents thereof; and
(e) General allegations of importations contrary to law without
indicating the specific law or rule to be violated.
No alert order shall be issued on account of allegations of
undervaluation unless said undervaluation is caused by the
submission to customs of forged or spurious invoice or other
commercial documents.
An alert order may be issued only after lodgement of the
goods declaration and prior to the release of goods from
customs custody. Under no circumstances shall, the
suspension of the processing of goods declaration be allowed
except through an alert order issued by an authorized customs
officer.
The costs of the physical inspection shall be borne by the
Bureau: Provided, That such cost shall be reimbursed by the
owner prior to the release of the goods if the physical
inspection results in the assessment of additional duties or
taxes or the issuance of a warrant of seizure.
The Commissioner shall be notified of the recommendation by
the alerting officer within twenty-four (24) hours from the
issuance of the alert order. Alert orders shall be dated and
assigned a unique reference number in series which shall be
the basis for reporting to and monitoring by the Commissioner
and the Secretary of Finance.
The Bureau shall create a central clearing house for alert
orders and shall submit reports quarterly on the status thereof.
Sec. 1112. Alert Orders on Perishable Goods. – When the
subject of the alert order are perishable goods, the Bureau
30
shall attach to the recommendation a certificate stating that
the goods are perishable.
CHAPTER 4
SEIZURE AND FORFEITURE
Sec. 1113. Property Subject to Seizure and Forfeiture. –
Property that shall be subject to seizure and forfeiture
include:ChanRoblesVirtualawlibrary
(a) Any vehicle, vessel or aircraft, including cargo, which shall
be used unlawfully in the importation or exportation of goods
or in conveying or transporting smuggled goods in commercial
quantities into or from any Philippine port or place. The mere
carrying or holding on board of smuggled goods in commercial
quantities shall subject such vehicle, vessel, aircraft, or any
other craft to forfeiture: Provided, That the vehicle, vessel,
aircraft or any other craft is not used as a common carrier
which has been chartered or leased for purposes of conveying
or transporting persons or cargo;cralawlawlibrary
(b) Any vessel engaging in the coastwise trade which shall
have on board goods of foreign growth, produce, or
manufacture in excess of the amount necessary for sea stores,
without such goods having been properly entered or legally
imported;cralawlawlibrary
(c) Any vessel or aircraft into which shall be transferred cargo
unloaded contrary to law prior to the arrival of the importing
vessel or aircraft at the port of destination;cralawlawlibrary
(d) Any part of the cargo, stores, or supplies of a vessel or
aircraft arriving from a foreign port which is unloaded before
arrival at the vessel's or aircraft's port of destination and
without authority from the customs officer; but such cargo,
ship, or aircraft stores and supplies shall not be forfeited if
such unloading was due to accident, stress of weather, or
other necessity and is subsequently approved by the District
Collector;cralawlawlibrary
(e) Goods which are fraudulently concealed in or removed
contrary to law from any public or private warehouse,
container yard, or container freight station under customs
supervision;cralawlawlibrary
(f) Goods, the importation or exportation of which are effected
or attempted contrary to law, or any goods of prohibited
importation or exportation, and all other goods which, in the
opinion of the District Collector, have been used, are or were
entered to be used as instruments in the importation or the
exportation of the former;cralawlawlibrary
(g) Unmanifested goods found on any vessel or aircraft if
manifest therefor is required;cralawlawlibrary
(h) Sea stores or aircraft stores adjudged by the District
Collector to be excessive, when the duties and taxes assessed
by the District Collector thereon are not paid or secured
forthwith upon assessment of the same;cralawlawlibrary
(i) Any package of imported goods which is found upon
examination to contain goods not specified in the invoice or
goods declaration including all other packages purportedly
containing imported goods similar to those declared in the
invoice or goods declaration to be the contents of the
misdeclared package;cralawlawlibrary
(j) Boxes, cases, trunks, envelopes, and other containers of
whatever character used as receptacle or as device to conceal
goods which are subject to forfeiture under this Act or which
are so designed as to conceal the character of such
goods;cralawlawlibrary
(k) Any conveyance actually used for the transport of goods
subject to forfeiture under this Act, with its equipage or
trappings, and any vehicle similarly used, together with its
equipment and appurtenances. The mere conveyance of
smuggled goods by such transport vehicle shall be sufficient
cause for the outright seizure and confiscation of such
transport vehicle but the forfeiture shall not be effected if it is
established that the owner of the means of conveyance used
as aforesaid, is engaged as common carrier and not chartered
or leased, or that the agent in charge thereof at the time, has
no knowledge of the unlawful act; and
(1) Goods sought to be imported or
exported:ChanRoblesVirtualawlibrary
(1) Without going through a customs office, whether the act
was consummated, frustrated, or attempted;cralawlawlibrary
(2) Found in the baggage of a person arriving from abroad and
undeclared by such person;cralawlawlibrary
(3) Through a false declaration or affidavit executed by the
owner, importer, exporter, or consignee concerning the
importation of such, goods;cralawlawlibrary
(4) On the strength of a false invoice or other document
executed by the owner, importer, exporter, or consignee
concerning the importation or exportation of such goods; or
(5) Through any other practice or device contrary to law by
means of which such goods entered through a customs office
to the prejudice of the government.
Sec. 1114. Properties not Subject to Forfeiture in, the Absence
of Prima Facie Evidence. – The forfeiture of the vehicle, vessel,
or aircraft shall not be effected if it is established that the
owner thereof or the agent in charge of the means of
conveyance used as aforesaid has no knowledge of or
participation in the unlawful act: Provided, That a prima
facie presumption shall exist against the vehicle, vessel, or
aircraft under any of the following
circumstances:ChanRoblesVirtualawlibrary
(a) If the conveyance has been used for smuggling
before;cralawlawlibrary
(b) If the owner is not in the business for which the
conveyance is generally used; and
(c) If the owner is not financially in a position to own such
conveyance.
Sec. 1115. Conditions Affecting Forfeiture of Goods. – The
forfeiture shall be effected only when and while the goods are
in the custody or within the jurisdiction of customs officers, or
in the possession or custody of or subject to the control of the
importer, exporter, original owner, consignee, agent of another
person effecting the importation, entry or exportation in
question, or in the possession or custody of or subject to the
control of persons who shall receive, conceal, buy, sell, or
transport the same, or aid in any of such acts, with knowledge
that the goods were imported, or were the subject of an
attempt at importation or exportation contrary to law.
Sec. 1116. Seizure or Release of Goods. – The District
Collector shall issue an order of release or a warrant of seizure
within five (5) days, or two (2) days in case of perishable
31
goods, upon the recommendation of the alerting officer or any
other customs officer. The District Collector shall immediately
make a report of such seizure or release to the Commissioner.
SBC. 1117. Warrant of Seizure or Order of Release. – The
District Collector shall have the authority to issue a warrant of
seizure of the goods upon determination of the existence of
probable cause and in case of nonexistence thereof, the
issuance of order of release. In case the District Collector
issued an order of release, the District Collector shall
immediately transmit all the records to the Commissioner who
shall automatically review within forty-eight (48) hours, or
within twenty-four (24) hours in case of perishable goods.
When no decision is made by the Commissioner within the
prescribed period, the imported goods shall be deemed
released.
The lifting of the alert order shall be issued by the District
Collector only upon the affirmation of the decision of the
District Collector by the Commissioner, or after the lapse of the
period of review by the Commissioner, whichever is earlier.
Sec. 1118. Sale of Perishable Goods During Forfeiture
Proceedings. – Upon motion of the importer of the perishable
goods, the goods may be sold at a public auction during the
pendency of the forfeiture proceedings. The proceeds of the
auction shall be held in escrow until the final resolution of the
proceedings.
Sec. 1119. Service of Warrant of Seizure. – The District
Collector shall cause the service of warrant of seizure to the
owner or importer of the goods or the authorized
representative thereof. The owner or importer shall be given
an opportunity to be heard during the forfeiture proceedings.
For the purpose of serving the warrant, the importer,
consignee, or person holding the bill of lading or airway bill
shall be deemed the "owner" of the goods. For the same
purpose, "authorized representative" shall include any agent of
the owner and if the owner or the agent is unknown, any
person having possession of the goods at the time of the
seizure.
Service of warrant to an. unknown owner shall be effected by
posting the warrant for fifteen (15) days in a public place at
the concerned district, and by electronic or printed publication.
Sec. 1120. Description, Classification and Valuation of Seized
Goods. – The District Collector shall cause the preparation of a
list and particular description, classification, and valuation of
the goods seized and valuation of identical or similar goods.
Sec. 1121. Proceedings in Case of Property Belonging to
Unknown Parties. – If, within fifteen (15) days after service of
warrant, no owner or agent can be found or appears before the
District Collector, the seized goods shall be forfeited ipso facto
in favor of the government to be disposed of in accordance
with this Act.
Sec. 1122. Seizure of Vessel or Aircraft for Delinquency of
Owner or Officer. – When the owner, agent, master, pilot in
command or other responsible officer of any vessel or aircraft
becomes liable for any violation of this Act, the vessel or
aircraft may be seized and be subjected to forfeiture
proceedings for the settlement of any fine or penalty for which
such person is liable. In determining whether or not to seize a
vessel or aircraft, the Bureau shall take into account the
amount of fine or penalty in relation to the commercial impact
that may be caused to international trade by the seizure or
detention as well as the value of the vessel or aircraft.
Sec. 1123. Burden of Proof in Forfeiture Proceedings. – In all
proceedings for the forfeiture of any vehicle, vessel, aircraft, or
goods under this Act, the burden of proof shall be borne by the
claimant.
Sec. 1124. Settlement of Pending Seizure Case by Payment of
Fine or Redemption of Forfeited Goods. – Subject to the
approval of the Commissioner, the District Collector may allow
the settlement by payment of fine or the redemption of
forfeited goods, during the course of the forfeiture proceeding.
However, the Commissioner may accept the settlement by
redemption of any forfeiture case on appeal. No settlement by
payment of fine shall be allowed when there is fraud or when
the discrepancy in duties and taxes to be paid between what is
determined and what is declared amounts to more than thirty
percent (30%).
In case of settlement by payment of fine, the owner, importer,
exporter, or consignee or agent shall offer to pay a fine
equivalent to thirty percent (30%) of the landed cost of the
seized goods. In case of settlement by redemption, the owner,
importer, exporter, or consignee or agent shall offer to pay the
redeemed value equivalent to one hundred percent (100%) of
the landed cost.
Upon payment of the fine or payment of the redeemed value,
the goods shall be released and all liabilities which may attach
to the goods shall be discharged without prejudice to the filing
of administrative or criminal case.
Settlement of any seizure case by payment of the fine or
redemption of forfeited goods shall not be allowed when there
is fraud, or where the importation is prohibited or the release
of the goods is contrary to law.
Sec. 1125. Decision in Forfeiture Cases. – In forfeiture cases,
the District Collector shall issue an order for hearing within
fifteen (15) days, or five (5) days in case of perishable goods,
from issuance of the warrant. The District Collector shall
render a decision within thirty (30) days upon termination of
the hearing, or within ten (10) days in case of perishable
goods. The decision shall include a declaration of forfeiture, the
imposition of a fine or such other action as may be proper.
CHAPTER 5
APPEAL IN PROTEST AND FORFEITURE CASES
Sec. 1126. Appeal to the Commissioner. – In forfeiture cases,
the person aggrieved by the decision of a District Collector
may, within fifteen (15) days or five (5) days in case of
perishable goods, from receipt of the decision, file a written
notice of appeal, together with the required appeal fee to the
District Collector, furnishing a copy to the Commissioner. The
District Collector shall immediately transmit all the records of
the proceedings to the Commissioner, who shall review and
decide on the appeal within thirty (30) days from receipt of the
records, or fifteen (15) days in the case of perishable
goods: Provided, That if within thirty (30) days, no decision is
rendered, the decision of the District Collector under appeal
shall be deemed affirmed. An appeal filed beyond the period
herein prescribed shall be dismissed.
Appeals to protest cases shall be governed by Section 114 of
this Act.
The decision of the Commissioner may be served through the
recognized modes of service under existing law.
Sec. 1127. Automatic Review in Forfeiture Cases. – The
32
Commissioner shall automatically review any decision by the
District Collector adverse to the government. The entire
records of the case shall be elevated within five (5) days from
the promulgation of the decision. The Commissioner shall
decide on the automatic review within thirty (30) days, or
within ten (10) days in the case of perishable goods, from
receipt of the records. When no decision is rendered within the
prescribed period or when a decision adverse to the
government is rendered by the Commissioner involving goods
with FOB or FCA value of ten million pesos (P10,000,000.00)
or more, the records of the decision of the Commissioner, or of
the District Collector under review, as the case may be, shall
be automatically elevated within five (5) days for review by the
Secretary of Finance. The decision issued by the Secretary of
Finance, whether or not a decision was rendered by the
Commissioner within thirty (30) days, or within ten (10) days
in the case of perishable goods, from receipt of the records,
shall be final upon the Bureau.
Sec. 1128. Automatic Review by the Secretary of Finance in
Other Cases. – In cases not involving protest or forfeiture, the
Commissioner shall automatically review any decision by the
District Collector that is adverse to the government. The
records of the case shall be elevated to the Commissioner
within five (5) days from the promulgation of the decision. The
Commissioner shall decide on the automatic review within
thirty (30) days from receipt of the records, or within ten (10)
days in the case of perishable goods. When no decision is
rendered within the prescribed period or when any decision
rendered by the Commissioner is adverse to the government,
the records of the ease under review shall be automatically
elevated within five (5) days for the review of the Secretary of
Finance. The decision issued by the Secretary of Finance,
whether or not a decision was rendered by the Commissioner
within thirty (30) days from receipt of the records, or within
ten (10) days in the case of perishable goods, shall be final
upon the Bureau.
CHAPTER 6
ABANDONMENT
Sec. 1129. Abandonment, Kinds and Effects of. – Imported
goods are deemed abandoned under any of the following
circumstances:ChanRoblesVirtualawlibrary
(a) When the owner, importer, or consignee of the imported
goods expressly signifies in writing to the District Collector the
intention to abandon the same; or
(b) When the owner, importer, consignee, or interested party
after due notice, fails to file the goods declaration within the
prescribed period in Section 407 of this Act: Provided, That the
term goods declaration shall include provisional or incomplete
goods declaration deemed valid by the Bureau as provided in
Section 403 of this Act. For this purpose, it is the duty of the
District Collector to post a list of all packages discharged and
their consignees, whether electronically or physically in the
District Office, or send a notice to the consignee within five (5)
days from the date of discharge; or
(c) Having filed such goods declaration, the owner, importer,
consignee or interested party after due notice, fails to pay the
assessed duties, taxes and other charges thereon, or, if the
regulated goods failed to comply with Section 117 of this Act,
within fifteen (15) days from the date of final
assessment: Provided, That if such regulated goods are subject
of an alert order and the assessed duties, taxes and other
charges thereof are not paid within fifteen (15) days from
notification by the Bureau of the resolution of the alert order,
the same shall also be deemed abandoned; or
(d) Having paid the assessed duties, taxes and other charges,
the owner, importer or consignee or interested party after due
notice, fails to claim the goods within thirty (30) days from
payment. For this purpose, the arrastre or warehouse
operator shall report the unclaimed goods to the District
Collector for disposition pursuant to the provisions of this Act;
or
(e) When the owner or importer fails to claim goods in customs
bonded warehouses within the prescribed period.
The due notice requirement under this section may be
provided by the Bureau through electronic notice or personal
service: Provided, That for non-regular importers, notification
shall be by registered mail or personal service. For this
purpose, the accreditation of importers, exporters, and other
third parties shall include provision for mandatory receipt of
electronic notices.
Sec. 1130. Treatment and Disposition of Abandoned Goods. –
Expressly abandoned goods under paragraph (a) of Section
1129 of this Act shall ipso facto be deemed the property of the
government and shall be disposed of in accordance with the
provisions of this Act.
If the Bureau has not disposed of the abandoned goods, the
owner or importer of goods impliedly abandoned may, at any
time within thirty (30) days after the lapse of the prescribed
period to file the declaration, reclaim the goods provided that
all legal requirements have been complied with and the
corresponding duties, taxes and other charges, without
prejudice to charges and fees due to the port or terminal
operator, as well as expenses incurred have been paid before
the release of the goods from customs custody.
When the Bureau sells goods which have been impliedly
abandoned, although no offense has been discovered, the
proceeds of the sale, after deduction of any duty and tax and
all other charges and expenses incurred as provided in Section
1143 of this Act, shall be turned over to those persons entitled
to receive them or, when this is not possible, held at their
disposal for a specified period. After the lapse of the specified
period, the balance shall be transferred to the forfeiture fund
as provided in Section 1151 of this Act.
CHAPTER 7
OTHER ADMINISTRATIVE PROCEEDINGS
Sec. 1131. Authority of the Commissioner to Make
Compromise. – Subject to the approval of the Secretary of
Finance, the Commissioner may compromise any
administrative case arising under this Act involving the
imposition of fines and surcharges, including those arising from
the conduct of a post clearance audit, unless otherwise
specified by law.
Cases involving forfeiture proceedings shall however not be
subject to any compromise.
CHAPTER 8
CIVIL REMEDIES FOR THE COLLECTION OF DUTIES AND
TAXES
33
Sec. 1132. Remedies for the Collection of Duties, Taxes, Fines,
Surcharges, Interests, and Other Charges.– The civil remedies
for the collection of import duties, taxes, fees, or charges
resulting from the conduct of a post clearance audit shall be
obtained by:ChanRoblesVirtualawlibrary
(a) Distraint of goods, chattels, or effects, and other personal
property of whatever character, including stocks and other
securities, debts, credits, bank accounts, and interest in and
rights to personal property, and by levy upon real property and
interest in rights to real property; and (b) Civil or criminal
action.
Either or both of these remedies may be pursued at the
discretion of the Bureau: Provided, That the remedies of
distraint and levy shall not be allowed when the amount of
duties and taxes involved is not more than ten thousand pesos
(10,000.00).
The Bureau shall advance the amounts needed to defray costs
of collection by means of civil or criminal action, including the
preservation or transportation of personal property distrained
and the advertisement and sale thereof, as well as of real
property and improvements thereon.
Sec. 1133. Constructive Distraint of the Property. – To
safeguard the interest of the government, the Commissioner
may place under constructive distraint the property of a
delinquent importer who, in the opinion of the Commissioner,
is retiring from any business subject to duty and tax, or is
intending to leave the Philippines, or to remove the property
therefrom, or to hide or conceal the property, or to perform
any act tending to obstruct the proceedings for collecting the
duty and tax due, or which may be due.
The constructive distraint of personal property shall be effected
by requiring the importer or any person in possession or
control of such property to sign a receipt covering the
property, to obligate to preserve the distrained property on the
state and condition at the time of the government's seizure of
the same, and not to dispose of the same in any manner
whatsoever, without the express authority of the
Commissioner.
In case the importer or the person in possession and control of
the property sought to be placed under constructive distraint
refuses or fails to sign the receipt herein referred to, the
customs officer effecting the constructive distraint shall
proceed to prepare a list of such property and, in the presence
of two (2) witnesses, leave a copy thereof in the premises
where the property distrained is located, after which the said
property shall be deemed to have been placed under
constructive distraint.
Sec. 1134. Summary Remedies. – (A) Distraint of Personal
Property. – Upon failure of the person owing any delinquent
duty, tax and other charges to pay at the time required, the
Commissioner shall seize and distraint the goods, chattels or
effects, and the personal property, including stocks and other
securities, debts, credits, bank accounts, and interests in and
rights to personal property of such persons, in sufficient
quantity to satisfy the duty, tax or other charge and the
expenses of the distraint and the cost of the subsequent sale.
The officer serving the warrant of distraint shall make or cause
to be made an account of the goods, chattels, effects, or other
personal property distrained, a copy of which, signed by the
said officer, shall be left either with the owner or person from
whose possession such goods, chattels, or effects or other
personal property were taken, or at the dwelling or other place
of business of such person and with someone of suitable age
and discretion, to which list shall be added a statement of the
sum demanded and note of the time and place of sale.
Stocks and other securities shall be distrained by serving a
copy of the warrant of distraint upon the importer and upon
the president, manager, treasurer, or other responsible officer
of the corporation, company or association, which issued the
said stocks or securities.
Debts and credits shall be distrained by leaving with the
person owing the debts or having in his/her possession or
under his/her control such credits, or with his/her agent, a
copy of the warrant of distraint. The warrant of distraint shall
be sufficient authority to the person owing the debts or having
in his possession or under his control any credits belonging to
the importer to pay to the Commissioner the amount of such
debts of credits.
Bank accounts shall be garnished by serving a warrant of
garnishment upon the importer and upon the president,
manager, treasurer, or other responsible officer of the bank
Upon the receipt of the warrant of garnishment, the bank shall
turn over to the Commissioner so much of the bank accounts
as may be sufficient to satisfy the claim of the government.
A report on the distraint shall, within ten (10) days from
receipt of the warrant, be submitted by the Commissioner to
the Secretary of Finance: Provided, That the Commissioner
shall have the power to lift such order of distraint subject to
the rules and regulations promulgated pursuant to this Act.
(B) Levy on Real Property. – After the expiration of the period
within which to pay the duty, tax and other charges as
prescribed in this section, real property may be levied upon,
before, simultaneously, or after the distraint of personal
property belonging to the importer. To this end, the
Commissioner or the duly authorized representative shall
prepare a duly authenticated certificate showing the name of
the importer and the amounts of the duty and tax and penalty
due. The certificate shall operate with the force of a legal
execution throughout the Philippines.
The levy shall be effected by writing upon the certificate a
description of the property on which levy is made. At the same
time, written notice of the levy shall be mailed to or served
upon the register of deeds of the province or city where the
property is located and upon the importer, or if the latter is not
in the Philippines, upon the agent or the manager of the
business from which the liability arose, or if there be none, to
the occupant of the property in question.
In case the warrant of levy on real property is not issued
before or simultaneously with the warrant of distraint on
personal property, and the personal property of the importer is
not sufficient to satisfy the duty and tax due, the
Commissioner or a duly authorized representative shall, within
thirty (30) days after execution of the distraint, proceed with
the levy on the real property of the importer.
Within ten (10) days after receipt of the warrant, a report on
any levy shall be submitted by the levying officer to the
Commissioner: Provided, That the Commissioner may lift such
warrants of levy issued, subject to the rules and regulations
promulgated pursuant to this Act.
CHAPTER 9
JUDICIAL PROCEEDINGS
34
Sec. 1135. Supervision and Control over Criminal and Civil
Proceedings. – Civil and criminal actions and proceedings
instituted on behalf of the Government under the authority of
this Act or other laws enforced by the Bureau shall be brought
in the name of the government of the Philippines and shall be
prosecuted and handled by the Bureau with the assistance of
the Department of Justice (DOJ): Provided, That the
determination of the existence of probable cause and the
subsequent filing of any criminal or civil case with the proper
court against violators of this Act shall exclusively belong to
the DOJ: Provided, however,That no civil or criminal action for
the recovery of duties or the enforcement of any fine, penalty
or forfeiture under this Act shall be filed in court without the
approval of the Commissioner.
Sec. 1136. Review by the CTA. – Unless otherwise provided in
this Act or by any other law, the party aggrieved by the ruling
or decisions of the Commissioner may appeal to the CTA, in
the manner and within the period prescribed by law and
regulations. Decisions of the Secretary of Finance when
required by this Act, may likewise be appealed to the CTA.
Unless an appeal is made to the CTA in the manner and within
the period prescribed by law and regulations, the ruling or
decision of the Commissioner or the Secretary of Finance shall
be final and executory.
Sec. 1137. Exclusive Jurisdiction of the Bureau. – Jurisdiction
over imported goods and goods for exportation shall be
exclusive to the Bureau, or the Secretary of Finance, when
under review by the latter, subject to the proceedings
described in this title.
Except for the CIA, no court may issue any order or decision
until all the remedies for administrative appeal have been
exhausted.
Sec. 1138. Fraud Investigation and Prosecution. – No criminal
case for violation of this title shall be instituted without the
approval of the Commissioner pursuant to the provisions of
this Act.
The Bureau shall have the power to investigate and institute
smuggling cases committed within its
jurisdiction: Provided, That in case of inquest, the same may
be instituted by the apprehending customs officer.
CHAPTER 10
DISPOSITION OF PROPERTY IN CUSTOMS CUSTODY
Sec. 1139. Goods Subject to Disposition. – Goods in customs
custody that are in the following conditions and status shall be
subject to disposition:ChanRoblesVirtualawlibrary
(a) Abandoned goods;cralawlawlibrary
(b) Goods entered under warehousing entry but not
withdrawn, or those whose duties and taxes have not been
paid within the period prescribed under Section 811 of this
Act;cralawlawlibrary
(c) Forfeited goods, other than prohibited, restricted and
regulated goods; after liability have been established by the
proper administrative or judicial proceedings in conformity with
the provisions of this Act; and
(d) Goods subject to a valid lien for customs duties, taxes and
other charges collectible by the Bureau, after the expiration of
the period allowed for payment thereof.
Sec. 1140. Place of Disposition of Goods. – Upon the order of
the District Collector, goods may be sold or otherwise disposed
of at the port where the goods are located, unless the
Commissioner shall direct its transfer to another port.
Sec. 1141. Mode of Disposition. – The goods subject to
disposition may be donated to another government agency or
declared for official use of the Bureau, after approval of the
Secretary of Finance, or sold at a public auction within thirty
(30) days after a ten (10)-day notice posted at a public place
at the port where the goods are located and published
electronically or in a newspaper of general circulation.
For purposes of donating the goods as above described, goods
suitable for shelter or consisting of foodstuffs, clothing
materials or medicines may be donated to the DSWD.
Sec. 1142. Disqualification to Participate in Auction Sale. – No
customs officer or employee, their spouses and relatives within
the fourth degree of consanguinity or affinity shall be allowed
to bid directly or indirectly, in any customs auction.
Sec. 1143. Disposition of Proceeds. – The following expenses
and obligations shall be paid from the proceeds of the sale in
the order provided:ChanRoblesVirtualawlibrary
(a) Customs duties, except in the case of forfeited
goods;cralawlawlibrary
(b) Taxes and other charges due the
government;cralawlawlibrary
(c) Government storage charges;cralawlawlibrary
(d) Expenses for the appraisal, advertisement, and sale of
auctioned goods;cralawlawlibrary
(e) Arrastre and private storage charges and demurrage
charges; and
(f) Freight, lighterage or general average, on the voyage of
importation, of which due notice shall have been given to the
District Collector.
The Commissioner is authorized to determine the maximum
charges to be recovered by private entities concerned under
subsections (e) and (f) of this section.
Sec. 1144. Disposition of Perishable Goods. – Perishable goods
as defined under this Act when certified as such by the Bureau,
may be sold at a public auction within five (5) days, after a
three (3)-day notice.
For this purpose, perishable goods shall include goods liable to
perish or be wasted, or those that depreciate greatly in value
while stored, or which cannot be kept without great
disproportionate expense. The Bureau shall proceed to
advertise and sell the same at auction upon notice as shall be
deemed to be reasonable. Sec. 1145. Disposition of Goods
Injurious to Public Health. – Goods in the custody of the
Bureau which, in the opinion of the District Collector are
injurious to public health, shall be seized. The District Collector
shall, if the matter is not disposable under the provisions
relating to food and drugs, appoint three (3) members to
constitute a Board to examine the goods. The Board shall be
composed of one (1) representative from either the DOH or
other appropriate government agency or the local government
unit (LGU) concerned, and two (2) representatives from the
Bureau. If the goods are found to be injurious to public health,
35
the Board shall report this to the District Collector, who shall
order its destruction in an appropriate manner or order its
reexportation in accordance with this Act.
The District Collector shall immediately coordinate with the
health and quarantine officers at the port of entry for the
disposition of goods injurious to public health.
Sec. 1146. Disposition of Prohibited Good. – Prohibited goods,
as provided in Section 118 of this Act, shall be destroyed,
except paragraph (d) thereof which shall be turned over to the
BSP. All goods suitable for shelter, foodstuffs, clothing
materials or medicines may be disposed in accordance with
Section 1141 of this Act.
Sec. 1147. Disposition of Restricted Goods. – Restricted goods
as described in Section 119 of this Act shall be disposed as
follows:ChanRoblesVirtualawlibrary
(a) Dynamite, gunpowder, ammunitions and other explosives,
firearms and weapons of war, and parts thereof shall be turned
over to the AFP;cralawlawlibrary
(b) Roulette wheels, gambling outfits, loaded dice, marked
cards, machines, apparatus or mechanical devices used in
gambling or the distribution of money, cigars, cigarettes, or
other goods when such distribution is dependent on chance,
including jackpot and pinball machines or similar contrivances,
or parts thereof shall be turned over to the appropriate
government body or agency;cralawlawlibrary
(c) Lottery and sweepstakes tickets, except advertisements
thereof, and lists of drawings therein shall be turned over to
the appropriate government body or agency;cralawlawlibrary
(d) Marijuana, opium, poppies, coca leaves, heroin, or other
narcotics or synthetic drugs which are or may hereafter be
declared habit forming by the President of the Philippines, or
any compound, manufactured salt, derivative, or preparation
thereof, shall be turned over to the Dangerous Drugs
Board;cralawlawlibrary
(e) Opium pipes and parts thereof, of whatever material, shall
be turned over to the Dangerous Drugs Board; and
(f) All other restricted goods which are highly dangerous to be
kept or handled shall be destroyed in a manner as the District
Collector deems appropriate. Otherwise, the restricted goods
shall be turned over to the proper government agency for
appropriate handling.
Sec. 1148. Disposition of Regulated Goods. – Regulated goods
shall be disposed of in a manner to be determined by the
appropriate regulatory agency. In the event that the regulatory
agency allows the disposition of the regulated goods with
commercial value and capable of legitimate use, these shall be
disposed of in accordance with Section 1141 of this Act.
Sec. 1149. Disposition of Unsold Goods for Want of Bidders. –
Goods subject to sale at public auction by the Bureau shall be
sold at a price not less than the landed cost of the goods
adjusted for normal depreciation.
Goods which remain unsold after at least two (2) public
biddings either due to the lack of bidders or for the lack of an
acceptable bid, may be donated to another government
agency or declared for official use of the Bureau. If the goods
are not suitable either for official use or donation, these may
be subject to reexport as government property or sold through
a negotiated sale. In case of negotiated sale, the same shall be
subject to the approval of the Secretary of Finance and
executed in the presence of a representative of the COA. For
purposes of donating the goods as above described, goods
suitable for shelter or consisting of foodstuffs, clothing
materials or medicines may be donated to the DSWD.
Sec. 1150. Disposition of Smuggled Goods. – Smuggled goods,
when forfeited, shall be disposed of as provided in Section
1148 of this Act.
Sec. 1151. Forfeiture Fund. – All proceeds from public auction
sales after deduction of the charges as provided in Section
1143 of this Act and subject to the claim of the owner or
importer of an impliedly abandoned goods as provided in
Section 1130 of this Act, shall be deposited in an account to be
known as Forfeiture Fund.
The Fund shall be in the name of and shall be managed by the
Bureau which is hereby authorized, subject to the usual
government accounting rules and regulations, to utilize it for
the following purposes:ChanRoblesVirtualawlibrary
(a) To outsource, subject to the rules on government
procurement established by law, the management of the
inventory, safekeeping, maintenance and sale of goods
enumerated in Section 1139 of this Act to private service
providers: Provided, That the Bureau shall retain jurisdictional
control and supervision over these goods as well as the
operations of the service provider so
contracted;cralawlawlibrary
(b) To facilitate customs seizure, abandonment and forfeiture
proceedings and the disposition of goods under Section 1139
of this Act, particularly those to be disposed of other than
through public sale;cralawlawlibrary
(c) To enhance customs intelligence and enforcement
capability to prevent smuggling; and
(d) To support the modernization program and other
operational efficiency and trade facilitation initiatives of the
Bureau.
The DOF and the Department of Budget and Management
(DBM) shall, upon the recommendation of the Bureau, issue a
joint regulation to implement the provisions of this section.
TITLE XII
THIRD PARTIES
CHAPTER 1
CUSTOMS SERVICE PROVIDERS
Sec. 1200. Customs Brokers and Other Service Providers. –
Upon the recommendation of the Commissioner, the Secretary
of Finance shall issue the necessary rules and regulations for
the registration of customs brokers and the accreditation of
other customs service providers to ensure compliance with this
Act and the rules and regulations that shall be promulgated to
implement it.
CHAPTER 2
CARRIERS, VESSELS, AND AIRCRAFTS
36
Sec. 1201. Ports Open to Vessels and Aircrafts Engaged in
Foreign Trade. – Vessels and aircrafts engaged in foreign trade
shall visit designated ports of entry only except as otherwise
especially allowed by law: Provided, That no existing and valid
government contract covering the handling of import and
export cargo shall be diminished or impaired. Every vessel or
aircraft arriving within a Customs District of the Philippines
from a foreign port shall dock at the designated port of entry
and shall be subject to the authority of the District Collector of
the port while within its jurisdiction.
Sec. 1202. Control of Customs Officer Over Boarding or
Leaving of Incoming Vessel and Over Other Vessel
Approaching the Former. – Upon the arrival in port of any
vessel engaged in foreign trade, it shall be unlawful for any
person, except the pilot, consul, quarantine officers, customs
officers, or other duly authorized persons, to board or leave
the vessel without permission of the customs officer
concerned. It shall likewise be unlawful for any tugboat,
rowboat, or other craft to go alongside such vessel and for any
person so authorized to board the vessel to take any
unauthorized person to board the same, or allow loitering near
or alongside such vessel. Unauthorized tugboats and other
vessels shall keep away from such vessel engaged in foreign
trade at a distance of not less than fifty (50) meters.
Sec. 1203. Documents to be Produced by the Master Upon
Entry of Vessel. – Upon entry of a vessel engaged in foreign
trade, the master thereof shall present the following certified
documents to the customs boarding
officers:ChanRoblesVirtualawlibrary
(a) The vessel's general declaration;cralawlawlibrary
(b) The original manifest of all cargoes destined for the port, to
be returned with the endorsement of the boarding
officers;cralawlawlibrary
(c) Three (3) copies of the original manifest, one of which,
upon certification by the boarding officer as to the correctness
of the copy, shall be returned to the master;cralawlawlibrary
(d) A copy of the cargo stowage plan;cralawlawlibrary
(e) Two (2) copies of the store list;cralawlawlibrary
(f) One (1) copy of the passengers list;cralawlawlibrary
(g) One (1) copy of the crew list;cralawlawlibrary
(h) The original copy of all through cargo manifest, for deposit
with the customs officer who has jurisdiction over the vessel
while in port;cralawlawlibrary
(i) The passengers manifest containing the names of all
foreigners, in conformity with the requirements of the
immigration laws in force in the Philippines;cralawlawlibrary
(j) One (1) copy of the original duplicate of fully accomplished
bill of lading;cralawlawlibrary
(k) The shipping goods and register of the vessel of Philippine
registry; and
(l) Such other related documents.
Sec. 1204. Manifest Required of Vessel from Foreign Port. –
Every vessel from a foreign port must have on board a
complete manifest of all its cargoes.
All cargoes intended to be landed at a port in the Philippines
must be described in separate manifests for each port of call.
Each manifest shall include the port of departure and the port
of delivery with, the marks, numbers, quantity, and description
of the packages and the names of the consignees. Every vessel
from a foreign port must have on board complete manifests of
passengers and baggage, in the prescribed form, setting forth
the destination and all particulars required by immigration
laws. Every vessel shall present to the proper customs officers
upon arrival in ports of the Philippines a complete list of all sea
stores then on board. If the vessel does not carry cargo or
passengers, the manifest must show that no cargo or
passenger is carried from the port of departure to the port of
destination in the Philippines.
A true and complete copy of the cargo manifest shall be
electronically sent in advance by the shipping company,
NVOCC, freight forwarder, cargo consolidator, or their agents
within the cut-off period as may be determined by the Bureau
before the arrival of the carrying vessel at the port of entry.
Upon arrival of the carrying vessel, the shipping company,
NVOCC, freight forwarder, cargo consolidator, or their agents
shall provide two (2) hard copies of the cargo manifest to the
Bureau in case the port of entry is either the Port of Manila
(PoM) or the Manila International Container Port (MICP), and
one (1) copy only in the case of the other ports of entry.
A cargo manifest shall in no case be changed or altered after
entry of vessel, except by means of an amendment, under
oath, by the master, consignee or agent thereof, which shall
be attached to the original manifest: Provided, That after the
invoice and/or goods declaration covering an importation have
been received and recorded in the office of the appraiser, no
amendment of the manifest shall be allowed, except when it is
obvious that a clerical error or any other discrepancy has been
committed in the preparation of the manifest, without any
fraudulent intent, the discovery of which would not have been
made until after examination of the importation has been
completed. Sec. 1205. Translation of Manifest. – The cargo
manifest and each copy thereof shall be accompanied by a
translation in English, if originally written in another language.
Sec. 1206. Manifests for the Commission on Audit and District
Collector. – Upon arrival of a vessel from a foreign port, the
Bureau shall provide electronic copies of the manifest to the
Chairperson of the COA. The master shall immediately present
to the District Collector the original copy of the cargo manifest
properly endorsed by the boarding officer, and for inspection,
the ship's register, or other documents in lieu thereof, together
with the clearance and other papers granted to the vessel at
the port of departure for the Philippines.
Sec. 1207. Production of Philippine Crew. – The master of a
Philippine vessel returning from abroad shall produce the
entire crew listed in the vessel's shipping crew manifest. If any
member is missing, the master shall produce proof satisfactory
to the District Collector that the member has died, or
absconded, has been forcibly impressed into another service,
or has been discharged. In case of discharge in a foreign
country, the master shall produce a certificate from the consul,
vice consul, or consular agent of the Philippines there residing,
showing that such discharge was effected with the consent of
the aforesaid representative of the Philippines.
Sec. 1208. Record of Arrival and Entry of Vessels and
Aircraft. – A record shall be made and kept open to public
inspection in every Customs District of the date of arrival and
entry of all vessels and aircraft.
Sec. 1209. Arrest of Vessel or Aircraft Departing Before Entry
Made. – When a vessel or aircraft arriving within the limits of a
37
Customs District from a foreign port departs or attempts to
depart before entry shall have been made, not being thereunto
compelled by stress of weather, duress of enemies, or other
necessity, the District Collector of the port may cause the
arrest and bring back such vessel or aircraft to the most
convenient port with the assistance of other concerned
agencies.
Sec. 1210. Discharge of Ballast. – When not brought to port as
goods, ballast of no commercial value may be discharged upon
permit granted by the District Collector for the purpose.
Sec. 1211. Time of Unloading Cargo. – Unloading of cargo
from a vessel or aircraft from a foreign port during official
nonworking hours shall be allowed subject to payment of
service fees by shipping lines, airlines, or other interested p
arties at rates prescribed by the Commissioner.
Sec. 1212. Entrance of Vessel through Necessity. – When a
vessel from a foreign port is compelled, by stress of weather or
other necessity to put into any other port than that of its
destination, the master within twenty-four (24) hours after its
arrival, shall make a protest under oath setting forth the
causes or circumstances of such necessity. This protest, if not
made before the District Collector, must be produced and
lodged with the District Collector.
Within the same time, the master shall make a report to the
District Collector if any part of the cargo was unloaded from
necessity or lost by casualty before arrival, and produce
sufficient proof to the District Collector of such necessity or
casualty before the latter who shall give the approval thereto
and the unloading shall be deemed to have been lawfully
effected.
Sec. 1213. Unloading of Vessel in Port from Necessity. – If a
situation arises where the unloading of the vessel is required
pending sojourn in port, the District Collector shall, upon
sufficient proof of the necessity, grant a permit therefore, and
the goods shall be unloaded and stored under the supervision
of customs officers.
At the request of the master of the vessel or the owner
thereof, the District Collector may grant permission to enter
the port and pay duties, taxes and other charges on, and
dispose of, such part of the cargo as may be perishable in
nature or as may be necessary to defray the expenses
attending the vessel.
Upon departure, the cargo, or a part thereof, may be reloaded
on board the vessel, and the vessel may proceed with the
same to its destination, subject only to the charge for storing
and safekeeping of the goods and the fees for entrance and
clearance. No port charges shall be collected on vessels
entering through stress of weather, duress or other urgent
necessities.
Sec. 1214. Entry and Clearance of Vessels of a Foreign
Government. – The entry and clearance of transport or supply
ship of a foreign government shall be in accordance with the
agreement by and between the Philippines and the foreign
government.
Sec. 1215. Clearance of Vessel for Foreign Port. – Before a
clearance shall be granted to any vessel bound to a foreign
port, the master or the agent thereof shall present to the
District Collector the following properly authenticated
documents:ChanRoblesVirtualawlibrary
(a) A bill of health from the quarantine officer or officer of the
public health service in the port;cralawlawlibrary

(b) Three (3) copies of the manifest of export cargo, one of
which, upon certification by the customs officer as to the
correctness of the copy, shall be returned to the
master;cralawlawlibrary
(c) Two (2) copies of the passengers list, showing foreigners
and other passengers;cralawlawlibrary
(d) The register and shipping goods, if the vessel is of
Philippine registry;cralawlawlibrary
(e) Clearance issued by the last port of entry; and
(f) A certificate from the Philippine Postal Corporation to the
effect that it received timely notice of the sailing of the
vessel: Provided, That the District Collector shall not permit
any vessel to sail for a foreign port if the master or agent
thereof refuses to receive bags of mail delivered to the same
by the Philippine Postal Corporation for transport upon
reasonable compensation. In case the Postmaster General and
the master or agent do not come to an agreement concerning
the amount of the compensation to be paid for the carriage of
the mail, the matter shall be submitted for decision to a Board
of Referees to be composed of three (3) members appointed,
respectively, by the Philippine Postal Corporation, the agency
of the company to which the vessel concerned belongs, and
the Bureau, who shall fix a reasonable rate of compensation.
Sec. 1216. Detention of Warlike Vessel Containing Arms and
Munitions. – District Collectors shall report to the proper
authorities or detain any vessel of commercial registry
manifestly built for warlike purposes and about to depart from
the Philippines with a cargo consisting principally of arms and
munitions of war,
when the number of men shipped on board or other
circumstances render it probable that such vessel is intended
to be employed by the owner or owners to cruise or commit
hostilities upon the subjects, citizens, or property of any
foreign principality or state, or of any colony, district, or people
with whom the Philippines is at peace, until the decision of the
President of the Philippines is rendered thereon, or until the
owner or owners shall give a security, in double the value of
the vessel and cargo, that it will not be so employed, if in the
discretion of the District Collector such security will prevent the
violation of the provisions of this section.
Sec. 1217. Oath of Master of Departing Vessel. – The master
of a departing vessel shall state under oath
that:ChanRoblesVirtualawlibrary
(a) All cargoes conveyed on the vessel, destined for the
Philippines, have been duly discharged or accounted
for;cralawlawlibrary
(b) A true copy of the outgoing cargo manifest has been
furnished to the Bureau;cralawlawlibrary
(c) No letters or packets, not enclosed in properly stamped
envelope sufficient to cover postage, have been received or
will be conveyed, except those relating to the vessel; and that
all mails placed on board the vessel before its last clearance
from the Philippines have been delivered at the proper foreign
port; and
(d) If clearing without passenger, the vessel will not carry
upon the instant voyage, from the Philippine port; any
passenger of any class, or other person not entered upon the
ship's declaration.
38
Sec. 1218. Extension of Time for Clearance. – At the time of
clearance, the master of a departing vessel shall be required to
indicate the time of intended departure, and if the vessel
should remain in port forty-eight (48) hours after the time
indicated, the master shall report to the District Collector for
an extension of time of departure, and without such extension
the original clearance shall be nullified.
Sec. 1219. Advance Notice of Aircraft Arrival. – (A)
Nonscheduled Arrivals. – Before an aircraft comes into any
area in the Philippines from any place outside thereof, a timely
notice of the intended flight shall be furnished to the District
Collector or other customs officer-in-charge at or nearest the
intended place of first landing, and to the quarantine and
immigration officers-in-charge at or nearest such place of
landing. If dependable facilities for giving notice are not
available before departure, the use of any radio equipment
shall be appropriate as long as it will result in the giving of
adequate and timely notice of the aircraft's approach,
otherwise landing shall be made at a place equipped with
navigational facilities. If, upon landing in any area, the
government officers have not arrived, the pilot-in-command
shall hold the aircraft and any baggage and goods thereon
intact and keep the passengers and crew members in a
segregated place until the inspecting officers arrive.
(B) Scheduled Arrivals. – Such advance notice will not be
required in the case of an airline arriving in accordance with
the regular schedule filed with the District Collector for the
Customs District in which the place of first landing area is
situated, and also with the quarantine and immigration
officers-in-charge of such place.
Sec. 1220. Landing at International Airport of Entry. – Except
in case of emergency or forced landings, aircraft arriving in the
Philippines from any foreign port or place shall make the first
landing at an international airport of entry, unless permission
to land elsewhere other than at an international airport of
entry is first obtained from the Commissioner. In such cases,
the owner, operator, or person in charge of the aircraft shall
pay the expenses incurred in inspecting the aircraft, goods,
passengers, and baggage carried thereon, and such aircraft
shall be subject to the authority of the District Collector at the
airport while within its jurisdiction.
Should an emergency or forced landing be made by an aircraft
coming into the Philippines at a place outside the jurisdiction of
the latter, the pilot-in-command shall not allow goods,
baggage, passenger, or crew member to be removed or to
depart from the landing place without permission of a customs
officer, unless such removal or departure is necessary for
purposes of safety, communication with customs officers, or
preservation of life, health, or property. As soon as practicable,
the pilot-in-command, or a member of the crew-in-charge, or
the owner of the aircraft, shall communicate with the customs
officer at the intended place of first landing or at the nearest
international airport or other customs port of entry in the area
and make a full report of the circumstances of the flight and of
the emergency or forced landing.
Sec. 1221. Report of Arrival and Entry of Aircraft. – The pilot-
in-command of any aircraft arriving from a foreign port or
place shall immediately report its arrival to the District
Collector at the airport of entry or to the customs officer
detailed to meet the aircraft at the place of first landing. Upon
arrival, such aircraft shall be boarded by a quarantine officer,
and after pratique or health clearance is granted, shall be
boarded by a customs officer; subsequently no person shall be
permitted to board or leave the aircraft without the permission
of the customs officer. The pilot-in-command or any other
authorized agent of the owner or operator of the aircraft shall
make the necessary entry. No such aircraft shall, without
previous permission from the District Collector, depart from
the place of first landing or discharge goods, passengers, or
baggage.
Sec. 1222. Documents Required in Making Entry for Aircraft. –
(a) For the purpose of making entry, there shall be presented
to the boarding customs officer four (4) copies of a general
declaration which shall contain the following data, unless any
of such data is otherwise presented on a separate official
form:ChanRoblesVirtualawlibrary
(1) Name of owner or operator of aircraft, registration marks
and nationality of aircraft, and flight number of
identification;cralawlawlibrary
(2) Points of clearance and entry, and date of
arrival;cralawlawlibrary
(3) Health and customs clearance at the last airport of
departure;cralawlawlibrary
(4) Itinerary of aircraft, including information as to airport of
origin and departure dates;cralawlawlibrary
(5) Names and nationality of crew members;cralawlawlibrary
(6) Passengers manifest showing places of embarkation and
destination;cralawlawlibrary
(7) Cargo manifest showing information as to airway bill
number, the number of packages related to each airway bill
number, nature of goods, destination, and gross weight,
together with a copy of each airway bill securely attached
thereto;cralawlawlibrary
(8) Store list; and
(9) Such other documents as may be required by the Bureau.
(b) The general declaration shall be written in English and duly
signed by the pilot-in-command or operator of the aircraft, or
the authorized agent. The section on health, and customs
clearances, however, shall be signed only by the pilot-in-
command or when necessary, by a crew member when the
general declaration itself has been signed by a non-crew
member. If the aircraft does not carry cargoes or passengers,
such facts must be shown in the manifest.
(c) A cargo manifest shall in no case be changed or altered
after entry of the aircraft, except by means of an amendment
by the pilot-in-command or authorized agent thereof, under
oath, and attached to the original manifest: Provided, That
after the invoice and/or goods declaration covering an
importation have been received and recorded in the office of
the appraiser, no amendment shall be allowed except when it
is obvious that a clerical error or any other discrepancy has
been committed without any fraudulent intent in the
preparation of the manifest, the discovery of which could not
have been made until after complete examination of the
importation.
Sec. 1223. Manifests for the Commission on Audit (COA) and
District Collector. – Upon arrival of an aircraft from a foreign
port, the Bureau shall provide electronic copies of the manifest
to the Chairperson of the COA. The master shall immediately
present to the District Collector the original copy of the cargo
manifest properly endorsed by the boarding officer, and for
inspection, the aircraft's register or other documents in lieu
thereof, together with the clearance and other papers granted
to the aircraft at the port of departure for the Philippines.
39
Sec. 1224. Clearance of Aircraft for Foreign Port. – (a) Any
aircraft bound to a foreign port shall, before departure, be
granted clearance by the Commissioner at an airport of entry
where such aircraft has been authorized to make its landing;
and
(b) Before clearance shall be granted to an aircraft bound to a
foreign port, there shall be presented to the District Collector
or to the customs officer detailed at the place of departure four
(4) copies of a general declaration signed by the pilot-in-
command or authorized agent of an aircraft which shall contain
the following data; (1) Name of owner or operator of aircraft,
registration marks and nationality of aircraft, and flight
number of identification;cralawlawlibrary
(2) Port of clearance, data thereof and
destination;cralawlawlibrary
(3) Health and customs clearance;cralawlawlibrary
(4) Itinerary of aircraft, including information as to airport of
destination and departure date;cralawlawlibrary
(5) Names and nationality of crew members;cralawlawlibrary
(6) Passengers manifest showing places of
destination;cralawlawlibrary
(7) Export cargo manifest showing information as to airway bill
number, the number of packages related to each airway bill
number, nature of goods, destination, and gross weight,
together with a copy of each airway bill securely attached
thereto; and
(8) Store list showing stores loaded.
Sec. 1225. Oath of Person-in-Charge of Departing Aircraft. –
The pilot-in-command or authorized agent of such departing
aircraft shall also state under oath to the effect
that:ChanRoblesVirtualawlibrary
(a) All cargoes conveyed on the aircraft destined to the
Philippines have been duly discharged and accounted for; and
(b) The aircraft has not received nor will convey any letter or
packet not enclosed in properly stamped envelope sufficient to
cover postage, except those relating to the cargo of the
aircraft, and that there was delivery to the proper foreign port
of all mails placed on board said aircraft before clearance from
the Philippines.
If an aircraft is cleared to depart without passengers, the
aircraft shall not carry any passenger thereon.
A record shall be made and kept open to public inspection in
every customs office at an airport of entry of the dates of
arrival and entry of all aircraft.
CHAPTER 3
OTHER THIRD PARTIES
Sec. 1226. Supervision and Regulation of Third Parties. – Third
parties transacting with the Bureau on behalf of importers and
consignees shall be treated equally as true importers or
consignees.
Third parties transacting with the Bureau shall be liable for
acts committed in violation of this Act and related laws.

Upon the recommendation of the Commissioner, the Secretary
of Finance shall issue rules and regulations to govern and
regulate the conduct of all third parties dealing directly with
the Bureau in relation to the importation, exportation,
movement, storage and clearance of goods for and on behalf
of another person. The rules and regulations shall provide for
specific conditions when third parties may or may not directly
transact with the Bureau and shall provide a written notice in
case such third parties are, for valid reasons, barred from
transacting with the Bureau. Third party is defined under
Section 102(uu) of this Act. For purposes of this section, third
parties may also refer to logistics providers; importers,
exporters, carriers, airlines, shipping lines, shipping agents,
forwarders, consolidators, port and terminal operators, and
warehouse operators, if such persons or entities transacted
with the Bureau.
CHAPTER 4
AUTHORIZED ECONOMIC OPERATORS (AEOs)
Sec. 1227. Treatment of Authorized Economic Operators
(AEOs). – The Bureau shall promulgate the necessary
procedures and requirements for the compliance of Authorized
Economic Operators (AEOs). For AEOs who have displayed
diligence in complying with the rules and the submission of
official customs requirements, and have satisfactorily managed
their commercial records, the Bureau shall extend the following
incentives:ChanRoblesVirtualawlibrary
(a) Release of the goods upon provision of the minimum
information necessary to identify the goods and permit the
subsequent completion of the final goods
declaration;cralawlawlibrary
(b) Grant of clearance of the goods at the declarant's premises
or another place authorized by the Bureau; and
(c) Other special procedures such
as:ChanRoblesVirtualawlibrary
(i) Allowing a single goods declaration for all imports or
exports in a given period where goods are imported or
exported frequently by the same person;cralawlawlibrary
(ii) Use of commercial records to self-assess their duty and tax
liability and, where appropriate, to ensure compliance with
other customs requirements; and
(iii) Allowing the lodgement of goods declaration by means of
an entry in the records by the authorized person to be
supported subsequently by a supplementary goods declaration.
Sec. 1228. Trade Facility for AEO. – The Secretary of Finance
shall, upon the recommendation of the Commissioner, issue
the necessary rules:ChanRoblesVirtualawlibrary
(a) To supervise and regulate the conduct and operations of
the AEO s, consistent with international best practices, the
World Customs Organization (WCO) framework of standards to
secure and facilitate global trade, and other international
conventions and agreements;cralawlawlibrary
(b) To develop a trade facilitation program for AEOs and other
authorized persons consistent with international best practices
and international conventions and agreements; and
(c) To recognize existing facilities where the authority or right
40
to operate AEOs has been granted by the relevant government
agency or regulator through a contract, where the Bureau
shall:ChanRoblesVirtualawlibrary
(i) Only require an endorsement by the relevant agency or
regulator;cralawlawlibrary
(ii) Issue a certificate of authority as a matter of course; and
(iii) Ensure that the term of the certificate of authority shall be
coterminous with the applicable government contract or any
extension thereof.
The Bureau shall implement the provisions of this chapter
without interfering, or impeding AEO operations as well as
existing operations of wharves, container yards, container
freight stations, warehouses, examination areas and other
facilities located in customs territory and/or in airports and
seaports. The Bureau shall likewise ensure that any
subsequent rules, regulations, orders or memoranda issued in
relation to AEOs shall be consistent with the appropriate
government agency's or regulator's prevailing operating
procedures and international hest practices.
Existing contracts of private operators with appropriate
government agency or regulator, such as, but not limited to,
the PPA, SBMA. and PIA and their respective authorities and
powers already granted by law pertinent to such contract, shall
not be impaired or adversely affected with the Bureau's
implementing rules and regulations on AEOs.
TITLE XIII
CUSTOMS FEES AND CHARGES
Sec. 1300. Customs Dues, Fees and Charges. – For services
rendered and documents issued by the Bureau, dues, fees and
charges shall be collected as may be provided under existing
regulations issued by the Secretary of Finance, upon the
recommendation of the Commissioner.
Sec. 1301. General Provision on the Authority to Increase or
Decrease Dues, Fees and Charges. –The Secretary of Finance
may, upon the recommendation of the Commissioner, increase
or decrease the dues, fees and charges collectible by the
Bureau to protect the interest of the government.
TITLE XIV
OFFENSES AND PENALTIES
CHAPTER 1
CRIMES AND OTHER OFFENSES
Sec. 1400. Misdeclaration, Misclassification, Undervaluation, in
Goods Declaration. – Misdeclaration as to quantity, quality,
description, weight, or measurement of the goods, or
misclassification through insufficient or wrong description of
the goods or use of wrong tariff heading resulting to a
discrepancy in duty and tax to be paid between what is legally
determined upon assessment and what is declared, shall be
subject to a surcharge equivalent to two hundred fifty percent
(250%) of the duty and tax due. No surcharge shall be
imposed when the discrepancy in duty is less than ten percent
(10%), or when the declared tariff heading is rejected in a
formal customs dispute settlement process involving difficult or
highly technical question of tariff classification, or when the
tariff classification declaration relied on an official government
ruling.
There is undervaluation when: (a) the declared value fails to
disclose in full the price actually paid or payable or any
dutiable adjustment to the price actually paid or payable; or
(b) when an incorrect valuation method is used or the
valuation rules are not properly observed, resulting in a
discrepancy in duty and tax to be paid between what is legally
determined as the correct value against the declared value.
When the undervaluation is established without the need to go
through the formal dispute settlement process provided for in
this Act, a surcharge shall be imposed equivalent to two
hundred fifty percent (250%) of the duty and tax due. No
surcharge shall be imposed when the discrepancy in duly is
less than ten percent (10%); or the declared value is rejected
as a result of an official ruling or decision under the customs
dispute settlement process involving difficult or highly technical
question relating to the application of customs valuation rules.
A discrepancy in duty and tax to be paid between what is
legally determined and what is declared amounting to more
than thirty percent (30%) shall constitute a prima
facie evidence of fraud.
When the misdeclaration, misclassification or undervaluation is
intentional or fraudulent, such as when a false or altered
document is submitted or when false statements or
information are knowingly made, a surcharge shall be imposed
equivalent to five hundred percent (500%) of the duty and tax
due and that the goods shall be subject to seizure regardless
of the amount of the discrepancy without prejudice to the
application of fines or penalties provided under Section 1401 of
this Act against the importer and other person or persons who
willfully participated in the fraudulent act.
Sec. 1401. Unlawful Importation or Exportation. – Any person
who shall fraudulently import or export or bring into or outside
of the Philippines any goods, or assist in so doing, contrary to
law, or shall receive, conceal, buy, sell, or in any manner
facilitate the transportation, concealment, or sale of such
goods after importation, or shall commit technical smuggling
as defined in this Act shall be penalized
by:ChanRoblesVirtualawlibrary
(a) Imprisonment of not less than thirty (30) days and one (1)
day but not more than six (6) months, or a fine of not less
than twenty-five thousand pesos (P25,000.00) but not more
than seventy-five thousand pesos (P75,000.00), or both, if the
appraised value of the goods unlawfully imported, to be
determined in the manner prescribed under this Act, including
duties and taxes, of the goods unlawfully imported does not
exceed two hundred fifty thousand pesos
(P250,000.00);cralawlawlibrary
(b) Imprisonment of not less than six (6) months and one (1)
day but not more than one (1) year, or a fine of not less than
seventy-five thousand pesos (P75,000.00) but not more than
one hundred fifty thousand pesos (P150,000.00), or both, if
the appraised value of the goods unlawfully imported, to be
determined in the manner prescribed under this Act, including
duties and taxes, exceeds two hundred fifty thousand pesos
(P250,000.00) but not more than five hundred thousand pesos
(P500,000.00);cralawlawlibrary
(c) Imprisonment of not less than one (1) year and one (1)
day but not more than three (3) years, or a fine of not less
than one hundred fifty thousand pesos (P150,000.00) but not
more than three hundred thousand pesos (P300,000.00) or
both, if the appraised value of the goods unlawfully imported,
to be determined in the manner prescribed under this Act,
including duties and taxes, exceeds five hundred thousand
41
pesos (P500,000.00) but not more than one million pesos (P
1,000,000.00);cralawlawlibrary
(d) Imprisonment of not less than three (3) years and one (1)
day but not more than six (6) years, or a fine of not less than
three hundred thousand pesos (P300,000.00) but not more
than one million five hundred thousand pesos (P
1,500,000.00), or both, if the appraised value of the goods
unlawfully imported, to be determined in the manner
prescribed under this Act, including duties and taxes, exceeds
one million pesos (P1,000,000.00) but not more than five
million pesos (P5,000,0 00.00);cralawlawlibrary
(e) Imprisonment of not less than six (6) years and one (1)
day but not more than twelve (12) years, or a fine of not less
than one million five hundred thousand pesos (P
1,500,000.00) but not more than fifteen million pesos
(P15,000,000.00), or both, if the appraised value of the goods
unlawfully imported, to be determined in the manner
prescribed under this Act, including duties and taxes, exceeds
five million pesos (P5,000,000.00) but not more than fifty
million pesos (P50,000,000.00);cralawlawlibrary
(f) Imprisonment of not less than twelve (12) years and one
(1) day but not more than twenty (20) years, or a fine of not
less than fifteen mill-inn pesos (P15,000,000.00) but not more
than fifty million pesos (P50,000,000.00), or both, if the
appraised value of the goods unlawfully imported, to be
determined in the manner prescribed under this Act, including
duties and taxes, exceeds fifty million pesos (P50,000,000.00)
but not more than two hundred million pesos
(P200,000,000.00);cralawlawlibrary
(g) If the appraised value of the goods unlawfully imported to
be determined in the manner prescribed under this Act,
including duties and taxes, exceeds two hundred million pesos
(P200,000,000.00) or if the aggregate amount of the
appraised value of the goods which are the subject of unlawful
importation committed in more than one instance, including
duties and taxes, exceeds two hundred million pesos
(P200,000,000.00), the same shall be deemed as a heinous
crime and shall be punishable with a penalty of reclusion
perpetua and a fine of not less than fifty million pesos
(P50,000,000.00); and
(h) The penalty of prision mayor shall be imposed when the
crime of serious physical injuries shall have been committed,
and the penalty of reclusion perpetua shall be imposed when
the crime of homicide shall have been committed by reason or
on the occasion of the unlawful importation.
In applying the above scale of penalties, an offender who is a
foreigner shall be deported without further proceedings after
serving the sentence. If the offender is a public officer or
employee, the penalty which is the next higher in degree shall
be imposed in addition to the penalty of perpetual
disqualification from public office, and disqualification to vote
and to participate in any public election. If the offender fails to
pay the fine, subsidiary imprisonment shall be served.
When, upon trial for violation of this section, the defendant is
shown to have had possession of the goods in question,
possession shall be deemed sufficient evidence to authorize
conviction unless the defendant shall explain the possession to
the satisfaction of the court: Provided, That each act of
unlawful importation or exportation shall be deemed as a
separate offense: Provided, however, That payment of the tax
due after apprehension shall not constitute a valid defense in
any prosecution, under this section: Provided, further, That
outright smuggling shall also be punishable under this
section: Provided, finally,That the rights and privileges
provided in this Act for the importers, consignees, exporters,
service providers, third parties and other third parties who
committed this offense shall be revoked.
Sec. 1402. Failure or Refusal of Party to Give Evidence or
Submit Documents for Assessment. – When the owner,
importer or consignee of any imported goods, or the agent of
either, fails or refuses, upon lawful demand in writing by any
customs officer to appear, lawfully depose, or submit to
examination or to answer any material question or refuses to
produce records, accounts or invoices in possession pertaining
to the value, classification or disposition of the goods in
question and deemed material in assessing the same, the
District Collector shall assess a surcharge of twenty percent
(20%) on the dutiable value of the goods which is the subject
of the importation.
Sec. 1403. Other Fraudulent Practices Against Customs
Revenue. – Any person who makes or attempts to make any
entry of imported or exported goods by means of any false or
fraudulent statement, document or practice or knowingly and
willfully files any false or fraudulent claim for payment of
drawback or refund of duties shall, for each act, be punished in
accordance with the penalties prescribed in Section 1401 of
this Act.
Sec. 1404. Failure to Declare Baggage. – Whenever dutiable
goods are not declared by any person arriving within the
Philippines, such goods shall be seized and the person may
obtain release of such goods, if not imported contrary to any
law, upon payment of a surcharge equivalent to thirty percent
(30%) of the landed cost of such goods, in addition to all
duties, taxes and other charges due. Nothing in this section
shall preclude the filing of criminal action against the offender.
Sec. 1405. Vessel, Seacraft, or Aircraft Departing Before
Undergoing Customs Formalities. – Any vessel, seacraft, or
aircraft arriving within the limits of a Customs District from a
foreign port which departs before undergoing customs
formalities, without being compelled to do so by stress of
weather, pursuit or duress of enemies, or other necessity, shall
be liable for a fine of not less than one hundred thousand
pesos (P100,000.00) but not more than three hundred
thousand pesos (P300,000.00).
Sec. 1406. Obstruction to Boarding Officer. – If the master or
pilot-in-command or any member of the complement of any
vessel or aircraft arriving at the Philippine port obstructs or
hinders any officer from lawfully going on board such vessel or
aircraft for the purpose of enforcing this Act, or intentionally
causes any officer to be so obstructed or hindered, the vessel
or aircraft shall be liable to a fine of not less than one hundred
thousand pesos (P100,000.00) but not more than three
hundred thousand pesos (P300,000.00).
Sec. 1407. Unlawful Boarding or Leaving of Vessel or
Aircraft. – If, upon arrival at the Philippine port, any master of
a vessel or pilot-in-command of an aircraft engaged in a
foreign trade permits any person to board or leave the vessel
or aircraft without the permission of the customs officer-in-
charge, the owner or operator of such vessel or aircraft shall
he liable for a fine of not less than one hundred thousand
pesos (100,000.00) but not more than three hundred thousand
pesos (P300,000.00).
Sec. 1408. Unloading of Cargo Before Arrival at Port of
Entry. – If, upon the arrival within the limits of any Customs
District of the Philippines of any vessel or aircraft engaged in
foreign trade, the master or pilot-in-command thereof permits
any part of the cargo to be unloaded before arrival at the port
of entry, and without authority from a proper customs officer,
42
the owner, operator, or agent of such vessel or aircraft shall he
liable for a fine of not less five hundred thousand pesos
(P500,000.00) but not more than two million pesos
(P2,000,000.00): Provided, That no fine shall accrue upon
satisfactory proof to the proper District Collector that the
unloading was rendered necessary by stress of weather,
accident or other necessity: Provided, however, That the fine
imposed herein shall be without prejudice to the application of
fines or penalties provided under Section 1401 of this Act.
Sec. 1409. Unloading of Cargo at Improper Time or Place After
Arrival. – The owner or operator of any vessel or aircraft from
which cargo is discharged upon arrival in the Philippines at a
time or place other than that designated by the District
Collector, shall be fined not less one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00): Provided, That no fine shall accrue upon
satisfactory proof to the proper District Collector that the
unloading was rendered necessary by stress of weather,
accident or other necessity.
Sec. 1410. Failure to Exhibit or Deposit Documents. – When
the master of a vessel or pilot-in-command of an aircraft
engaged in foreign trade fails to submit to the District Collector
at the time of entry of the vessel or aircraft the register or
other documents in lieu thereof, together with the clearance
and other documents granted by the customs officers to the
vessel or aircraft at the last foreign port of departure, or fails
to exhibit any certificate or other documents required to be
then exhibited, the owner or operator of such vessel or aircraft
shall be liable for a fine of not less than one hundred thousand
pesos (P100.000.00) but not more than three hundred
thousand pesos (P300,000.00).
Sec. 1411. Bringing of Unmanifested Arms, Explosives or War
Equipment. – The owner, operator, or agent of a vessel or
aircraft arriving at a port in the Philippines bearing cargo
consisting of firearms, gunpowder, cartridges, dynamite or any
other explosives, munitions or equipment of war not contained
in the manifest of the vessel or aircraft, or which are concealed
on board, shall be liable for a fine of not less than five hundred
thousand pesos (P500,000.00) but not more than one million
pesos (P1,000,000.00).
Sec. 1412. Failure to Supply Advance and Requisite
Manifests. – Failure to transmit the electronic manifest within
the required time as may be prescribed by the Bureau, prior to
arrival of the carrying vessel or aircraft at the port of entry
shall make the owner, operator, or agent of the vessel or
aircraft liable for a fine of not less than one hundred thousand
pesos (P100,000.00) but not more than three hundred
thousand pesos (P300,000.00).
If the transit time from port of origin to port of entry is at least
seventy-two (72) hours, the shipping or forwarding agent of
the carrier or the vessel who fails to submit the manifest at
least twenty-four (24) hours before entry shall likewise be
liable for a fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00).
Sec. 1413. Disappearance of Manifested Goods. – When any
package or goods mentioned in the manifest meant to be
unloaded at the port of destination is not unloaded upon the
arrival of the vessel or aircraft, its agent shall be liable for a
fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00) unless the disappearance of the package
or the goods in question was not due to the negligence of the
master of the vessel or pilot-in-command of an aircraft, and is
explained to the satisfaction of the District Collector.

The owner, operator, or agent of a vessel or aircraft shall be
liable for the payment of the same fine when a package or
goods listed in the manifest does not tally materially in
character or otherwise with the description thereof in the
manifest.
Sec. 1414. Discrepancy Between Actual and Declared Weight
of Manifested Goods. – If the gross weight of goods or package
described in the manifest or bill of lading exceeds the declared
weight by more than ten percent (10%), and such discrepancy
was due to the negligence of the master or pilot-in-command,
the owner, employee, operator or agent of the importing
vessel or aircraft shall be liable for a fine of not more than
twenty percent (20%) of the value of the package or goods in
respect to which the deficiency exists.
Sec. 1415. Discrepancy With the Master's or Pilot's-in-
Command Report. – When a vessel or aircraft arriving from a
foreign port is compelled by necessity to unload in another
port other than the port of entry and permission is granted by
the District Collector for the unloading of the vessel or aircraft
or the delivery of any part of the cargo and it shall be found
that there is discrepancy between the cargo unloaded and the
report of the master or the pilot-in-command and such
discrepancy is not satisfactorily explained, the owner, operator
or agent of the vessel or aircraft shall be liable for a fine of not
less than one hundred thousand pesos (P100,000.00) but not
more than three hundred thousand pesos (P300,000.00).
Sec. 1416. Failure to Report Fraud. – A master, pilot-in-
command or other officer, owner or agent of any vessel or
aircraft trading with or within the Philippines who has
knowledge of the commission of fraud that shall result in the
loss or diminution of customs revenue but fails to report all
information relative thereto to the Distract Collector shall be
penalized with imprisonment of not less than six (6) months
and one (1) day but not more than one (1) year and shall be
liable for a fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00). If the offender is a foreigner, the
offender shall be deported after serving the sentence. If the
offender is a public officer or employee, the offender shall
suffer additional penalty of perpetual disqualification to hold
public office, to vote and to participate in any election. All the
benefits due from service in the government, including the
separation and retirement benefits, shall be forfeited.
Sec. 1417. False Statement of Vessel's or Aircraft's
Destination. – When the master or pilot-in-command of a
vessel or aircraft loaded with goods shall make a false
statement as to the next destination of such vessel or aircraft
when that information is required by a customs officer, the
owner or operator of such vessel or aircraft shall be liable for a
fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00). The arrival of a vessel or aircraft at a
different port other than the one it had been originally
authorized and cleared for without having been impelled to do
so by necessity, shall be prima facie proof that the original
statement of the actual destination of the vessel or aircraft was
false.
Sec. 1418. Affixing Seals. – Any person who, without
authority, affixes or attaches a customs seal, fastening, or any
mark, or fastening purporting to be a customs seal, to any
vessel, aircraft, vehicle, warehouse, or package, shall be
penalized with imprisonment of not less than six (6) months
and one (1) day but not more than one (1) year, and shall be
liable for a fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
43
pesos (P300,000.00). If the offender is a foreigner, the
offender shall be deported after serving the sentence. If the
offender is a public officer or employee, the offender shall
suffer an additional penalty of perpetual disqualification to hold
public office and disqualification from exercising the right to
vote and to participate in any election.
Sec. 1419. Breaking of Seal Placed by Customs Officers. – If
any seal placed by a customs officer upon any vessel or
aircraft or compartment thereof, or upon any box, trunk or
other package of goods on board is broken, the owner,
operator, or agent of the vessel or aircraft shall be liable for a
fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00) for each broken or destroyed seal.
Sec. 1420. Breaking of Lock or Fastening Placed by Customs
Officers. – If any lock or other fastening device placed by a
customs officer upon any hatch door, or other means of
communication in the hold of a vessel or aircraft, or other part
thereof for the security of the same during the night time, is
unlawfully opened, broken or removed, or if any of the goods
contained in the hold or in the other compartments so secured
is clandestinely abstracted and landed, the owner, operator, or
agent of the vessel or aircraft shall be liable for a fine of not
less than one hundred thousand pesos (P100,000.00) but not
more than three hundred thousand pesos (P300.000.00).
Sec. 1421. Removal, Breakage, and Alteration of Marks. – Any
person who, without authority, willfully removes, breaks,
injures, defaces or alters any customs seal or other fastening
or mark placed upon any vessel, vehicle, on land, sea or air,
warehouse or package containing merchandise or baggage in
bond or in customs custody, shall be punished with the penalty
prescribed in Section 1420 hereof.
Sec. 1422. Unauthorized Withdrawal of Imported Goods from
Bonded Warehouse. – Any person who causes the
unauthorized withdrawal of imported goods stored from a CBW
shall be liable for payment of a surcharge of fifty percent
(50%) of duties, taxes, customs fees, and charges, found to be
due and unpaid. The amount of surcharge shall be added to
the duties, taxes and charges due on the goods withdrawn. If
the delinquency lasts for more than one (1) year, the
surcharge shall be increased by twenty-five percent (25%) of
the unpaid duties and taxes annually: Provided, That where
the withdrawal is attended with fraud, such as when a fake or
altered withdrawal permit is submitted, the warehouse
operator shall be held liable under the pertinent provisions of
this Act, without prejudice to the suspension or revocation of
the warehousing privileges granted by the Bureau pursuant to
this Act.
Sec. 1423. Removing or Repacking Goods in Warehouse. – Any
person who fraudulently conceals, removes, or repacks
merchandise in any warehouse or fraudulently alters, defaces,
or obliterates any mark or numbers placed upon packages
deposited in such warehouse, or shall aid or abet any such
acts, shall be punished with the penalties prescribed in Section
1418 hereof.
Merchandise so concealed, removed, or repacked, or packages
upon which marks, numbers or the values thereof have been
so altered, defaced, or obliterated shall be forfeited in favor of
the government.
Sec. 1424. Removing Goods from Customs Custody. – Any
person who enters any warehouse, or any vehicle loaded with
or containing merchandise with intent to unlawfully remove
therefrom any merchandise or baggage in such vessel, vehicle
or warehouse or otherwise in customs custody or control, or
any person who receives or transports any merchandise or
baggage unlawfully removed from any such vessel, vehicle or
warehouse, or shall aid or abet such removal, shall suffer the
penalties provided in Section 1401 hereof.
Sec. 1425. Failure to Pay Duties, Taxes and Other Charges. –
For failure to pay the duties, taxes and other charges of an
assessment within fifteen (15) days from the date of final
assessment, a surcharge of ten percent (10%) of the total
assessed amount or balance thereon shall be added and
collected, which surcharge shall be increased to twenty-five
percent (25%) if the delinquency lasts for more than one (1)
year.
Sec. 1426. Breach of Security. – Upon breach of security
require d to be filed under this Act, the District Collector,
subject to the approval of the Commissioner, may accept in
satisfaction thereof a smaller stun than that mentioned in the
penalty clause of the security, but in no case less than the
amount necessary to indemnify the government for the
damage occasioned by such breach.
Sec. 1427. Failure to Keep Importation Records and Full
Access to Customs Officers. – Any person who fails to keep all
the records of importations or books of accounts, business and
computer systems and all customs commercial data in the
manner prescribed under this Act, shall be punished with
imprisonment of not less than three (3) years and one (1) day
but not more than six (6) years and/or a fine of one million
pesos (Pl,000,000.00). This penalty shall likewise be imposed
against importers and brokers who deny an authorized
customs officer full and free access to such records, books of
accounts, business and computer systems, and all customs
commercial data including payment records, without prejudice
to the imposition of the administrative sanctions by the Bureau
against contumacious importers, including the authority to hold
delivery or release of their imported goods.
Sec. 1428. Concealment or Destruction of Evidence of Fraud. –
Any person who willfully conceals or destroys any invoice,
book, or document relating to any goods liable to duty after an
inspection thereof has been demanded by the District Collector
or at any time conceals or destroys any such invoice, book, or
document for the purpose of suppressing any evidence of fraud
therein contained, shall be penalized with imprisonment of not
less than three (3) years and one (1) day but not more than
six (6) years and shall be liable for a fine of not less than three
hundred thousand pesos (P300,000.00) but not more than one
million pesos (P1,000,000.00).
Sec. 1429. Other Offenses. – The owner or operator of a
vessel, aircraft or train shall be liable for a fine for the
following acts:ChanRoblesVirtualawlibrary
(a) For anchoring at any dock, pier, wharf, quay, or bulkhead
other than a port of entry, a fine of not less than five hundred
thousand pesos (P500,000.00) but not more than one million
pesos (P1,000,000.00) for overseas vessels;cralawlawlibrary
(b) For dumping of garbage or slops over the sides of the
vessel within three (3) miles from the nearest coastline, a fine
of not less than one million pesos (P1,000,000.00) but not
more than ten million pesos (P10,000,000.00);cralawlawlibrary
(c) For dumping or causing to spread crude oil, kerosene, or
gasoline in the bay or at the piers within three (3) miles from
the nearest coastline, a fine of not less than one million pesos
(P1,000,000.00) but not more than ten million pesos (P
10,000,000.00) for each offense;cralawlawlibrary
(d) For loading gasoline or any other petroleum products at a
44
place other than that designated, by the regulations, a fine of
not less than five hundred thousand pesos (P500,000.00) but
not more than one million pesos (P1,000,000.00) for each
offense;cralawlawlibrary
(e) For causing the emission and spread of harmful gas, fumes
and chemicals, a fine of not less than one million pesos
(P1,000,000.00) but not more than ten million pesos
(P10,000,000.00) for each offense; and
(f) For transporting hazardous waste, radioactive waste and
other toxic substances as provided under the Basel Convention
and Republic Act No. 6969, otherwise known as the "Toxic
Substances and Hazardous and Nuclear Wastes Control Act of
1990", the penalty shall be forfeiture of the vessel in favor of
the government.
The fines imposed herein shall be without prejudice to the
application of fines or penalties provided under special laws
and regulations.
Sec. 1430. Violations of this Act and Rules and Regulations in
General. – Any person who violates any other provision of this
Act or the rules and regulations issued pursuant thereto, shall
be penalized with imprisonment of not less than thirty (30)
days and one (1) day but not more than one (1) year, or be
liable for a fine of not less than one hundred thousand pesos
(P100,000.00) but not more than three hundred thousand
pesos (P300,000.00), or both. If the offender is a foreigner,
the offender shall be deported after serving the sentence. If
the offender is a public officer or employee, the offender shall
be disqualified from holding public office, from exercising the
right to vote and to participate in any public election for ten
(10) years.
CHAPTER 2
PENALTIES IMPOSED UPON BUREAU EMPLOYEES
Sec. 1431. Statutory Offenses of Officers and Employees. –
Every officer, agent, or employee of the Bureau or of any other
agency of the government charged with the enforcement of
the provisions of this Act, who shall be found guilty of any
delinquency as described below shall be penalized with
imprisonment of not less than six (6) years and one (1) day
but not more than twelve (12) years, and perpetual
disqualification to hold public office, from exercising the right
to vote and to participate in any public election and a fine of
not less than five hundred thousand pesos (P500,000.00), but
not more than one million pesos
(P1,000,000.00):ChanRoblesVirtualawlibrary
(a) Extortion or willful oppression under color of
law;cralawlawlibrary
(b) Knowingly demanding other or greater sums that are
authorized by law or receive any fee, compensation, or reward
except as by law prescribed, for the performance of any
duty;cralawlawlibrary
(c) Willfully neglecting to give receipts, as required by law, for
any sum collected in the performance of duty, or who willfully
neglect to perform any of the duties enjoined
bylaw;cralawlawlibrary
(d) Conspiring or colluding with another or others to defraud
the customs revenue or otherwise violate the
law;cralawlawlibrary
(e) Providing an opportunity for any person to defraud the
government of customs revenue or failing to do any act with
the intent to enable any person to defraud the government of
customs revenue;cralawlawlibrary
(f) Negligently or designedly permitting the violation of the law
by any other person;cralawlawlibrary
(g) Making or signing for any false entry or entries in any
book, making or signing any false certificate or return in any
case where the law requires the making by them of such entry
certificate or return;cralawlawlibrary
(h) Failing to report knowledge or information to their superior
officer about an act or acts of fraud committed in revenue
collection as required by law;cralawlawlibrary
(i) Demanding or accepting or attempting, without authority,
to collect directly or indirectly as payment or otherwise, any
sum of money or other thing of value for the compromise,
adjustment, or settlement of any charge or complaint for any
violation or alleged violation of law;cralawlawlibrary
(j) Unlawfully disclosing confidential information gained during
any investigation or audit, or using such information for
personal gain or to the detriment of the government, the
Bureau, or third parties.
All the benefits due from service in the government, including
separation and retirement benefits, of an officer, agent, or
employee of the Bureau or of any other agency of the
government charged with the enforcement of the provisions of
this Act found guilty of the foregoing violations shall be
forfeited.
Sec. 1432. Failure to Report Fraud. – Any employee of the
Bureau who has knowledge of any fraud committed against the
government pertaining to customs revenue, and who fails to
report all information relative thereto to the District Collector,
shall be penalized with imprisonment of not less than six (6)
years and one (1) day but not more than twelve (12) years
and a fine of not less than five hundred thousand pesos
(P500,000.00) but not more than one million pesos
(1,000,000.00). The offender shall suffer the additional penalty
of perpetual disqualification to hold public office, to vote and to
participate in any election. All the benefits of the offender due
from service in the government, including separation and
retirement benefits, shall be forfeited.
Sec. 1433. Liability for Other Offenses. – The fines and
penalties imposed in this chapter shall be without prejudice to
the application of fines or penalties provided under Chapter 1
of this title and special laws and regulations.
TITLE XV
MISCELLANEOUS PROVISIONS
Sec. 1500. Information, Decisions, and Rulings. – The Bureau
shall ensure that all information of general application
pertaining to customs, including revisions or amendments
thereto, shall be available to the general public.
Sec. 1501. Period to Issue Ruling. – Unless otherwise provided
in this Act, the issuing authority shall act on the application for
ruling within thirty (30) days from receipt of the application
and supporting documents as may be required by regulation.
Within three (3) days from issuance of a ruling, the issuing
authority shall notify the requesting party of such ruling.
Sec. 1502. Publication and Confidentiality of Certain
45
Information in Ruling – The Bureau and the Commission shall
regularly publish its rulings in a manner accessible to the
public. For this purpose, each application for ruling shall be
assigned a title and unique ruling number for easy reference.
The publication shall contain information on the goods
involved, the body or summary of the ruling, particularly the
grounds relied upon to support the ruling, but shall exclude the
name of the requesting party and other information which by
their very nature are confidential, including those which the
requesting party indicated in its application as confidential in
nature. Except in the context of judicial proceedings, any
disclosure of confidential information under this section shall
not be made except upon the written consent of the
beneficiary of the advance ruling.
Sec. 1503. Duty of District Collector to Report Rulings to the
Commissioner. – When any new or unsettled question shall be
determined by a District Collector, and if the matter is not
otherwise appealed for review in the ordinary course, the
District Collector shall notify the Commissioner of the decision
and submit an adequate statement of the facts involved.
Sec. 1504. Application of Established Ruling or Decision. – A
ruling or decision of the Commissioner which determines the
construction or application of any provision of law imposing
customs duties and taxes, and which changes any existing
established valuation, classification, rules of origin and other
customs rules, interpretation or practice shall not take effect
until thirty (30) days after public notice shall have been given
in the form of a published decision. When the ruling or decision
favors the taxpayers, it shall become effective immediately.
Sec. 1505. Authority of Official to Administer Oaths and Take
Testimony. – The Commissioner, District Collectors and their
deputies, and other customs officers especially deputized by
the District Collector shall have authority to administer oaths
and take testimony in connection with any matter within the
jurisdiction of the Bureau and, in connection therewith, may
require the production of relevant papers, documents, books
and records in accordance with law.
Sec. 1506. General Security. – In cases where securities are
required to be given under the provisions of this Act and
related customs laws, the District Collector, instead of
requiring separate special security where transactions of a
particular party are numerous, may accept general security
extending over such periods of time and covering such
transactions of the party in question as may be satisfactory to
the District Collector.
Sec. 1507. Security. – The Bureau shall prescribe the forms
and amount of security required to guarantee the payment of
duties and taxes and other obligations provided for in this Act.
Any party required to provide security shall have the option to
choose from any form of security prescribed by the Bureau.
The Bureau may not require security if satisfied that an
obligation to the Bureau will be fulfilled, but shall require and
accept a general security from declarants who regularly
declare goods at different offices in customs territory under
such terms and conditions as maybe determined by the
Commissioner.
The required amount of security shall be the lowest possible
and shall not exceed the amount of imposable duties, taxes
and other charges.
When the obligation under which the security was required has
been satisfied, the security shall be discharged immediately.
Sec. 1508. Customs Service Fees. – Customs personnel may
be assigned by a District Collector to render overtime work and
other customs services and shall be paid for such services by
the Bureau, according to service fees fixed by the
Commissioner and approved by the Secretary of Finance. The
Bureau may charge additional customs service fees when
applicable, subject to the rates prescribed under existing rules
and regulations.
Sec. 1509. Testimony in Writing. – When testimony is taken in
any proceeding or matter under the authority of the Bureau,
either party may require that the testimony shall be made in
writing, and when so taken, the written testimony shall be filed
with the Office of the District Collector and to be preserved for
use or reference until the final decision has been reached.
Sec. 1510. District Collector Not Liable in Respect to Ruling in
Customs Cases. – Every District Collector or other officials of
the Bureau shall not be in any way personally liable on account
of any official ruling or decision as to which the person
claiming to be aggrieved has the right to obtain either an
administrative or judicial review. Except for misdelivery of
goods, a District Collector may not, in the absence of abuse of
authority, be liable to any person for any loss occasioned
either by the official act or the acts of the subordinates.
Sec. 1511. Interest Prohibited to be Held by Customs
Employees. – Any person employed under the authority of the
government in the assessment of duties, taxes, fees and other
charges in connection with imports or exports, shall not own,
either in whole or in part, any vessel or aircraft or act as
attorney, agent or consignee for the owner of any vessel or
aircraft or of any cargo loaded on board the vessel or aircraft;
and shall not import or be involved, directly or indirectly, in the
importation of any goods for sale into the Philippines.
Sec. 1512. Reward to Persons Instrumental in the Actual
Collection of Additional Revenues Arising from the Discovery of
Violations of this Act. – A cash reward equivalent to twenty
percent (20%) of the actual proceeds from the sale of
smuggled goods and confiscated goods or actual collection of
additional revenues shall be given to the customs and non-
customs informers or whistleblowers who are instrumental in
the collection of additional revenues arising from the discovery
of violations of this Act in accordance with the rules and
regulations to be issued by the Secretary of Finance.
Sec. 1513. Outsourcing of Non-Sovereign Customs Functions
to Private Entities. – Subject to the approval of the Secretary
of Finance, the Bureau may outsource any of its non-sovereign
and ancillary function to a qualified and competent private
entity in accordance with, government rules on service
procurement.
Sec. 1514. International Standards and Best Practices. – The
Bureau may adopt international standards and best practices
in customs administration laid down by international
agreement or convention pertaining to trade facilitation, supply
chain security, and related matters, whether or not the
Philippines is a signatory to such international agreement or
convention.
TITLE XVI
TARIFF ADMINISTRATION AMD POLICY
CHAPTER I
TARIFF COMMISSION
Sec. 1600. Chief Officials of the Tariff Commission and
Qualifications. – The officials of the Tariff Commission shall
46
consist of a Chairperson and two (2) Commissioners to be
appointed by the President of the Philippines. The Chairperson
and the Commissioners shall be natural-born citizens of the
Philippines, of good moral character and proven integrity, and
who, by experience and academic training possess the
necessary qualifications requisite for developing expert
knowledge of tariff and trade related matters. During their
terms of office, the Chairperson and the Commissioners shall
not engage in the practice of any profession, or intervene
directly or indirectly in the management or control of any
private enterprise which may, in anyway, be affected by the
functions of their office. They shall not be, directly or
indirectly, financially interested in any contract with the
government, or any subdivision or instrumentality thereof.
Sec. 1601. Appointment and Compensation of Officials and
Employees. – All employees of the Commission shall be
appointed by the Chairperson in accordance with, the Civil
Service Law except as the private secretaries to the offices of
the Chairperson, Commissioners and Executive Director.
Sec. 1602. Official Seal. – The Commission is authorized to
adopt an official seal.
Sec. 1603. Functions of the Commission. – The Commission
shall have the following functions:ChanRoblesVirtualawlibrary
(a) Adjudicate cases on the application of trade remedies
against imports pursuant to Sections 711, 712 and 713 of this
Act;cralawlawlibrary
(b) Study the impact of tariff policies and programs on national
competitiveness and consumer welfare in line with the
economic objectives of the government;cralawlawlibrary
(c) Administer the Philippine tariff schedules and tariff
nomenclatures;cralawlawlibrary
(d) Issue advance rulings on tariff classification of imported
goods and render rulings on disputes over tariff classification
of goods pursuant to Section 1100 of this Act, except in cases
involving goods on which the Commission has provided
advance ruling on tariff classification;cralawlawlibrary
(e) Provide the President and Congress with independent
analysis, information and technical support on matters related
to tariff and nontariff measures affecting Philippine industries
and exports for policy guidance;cralawlawlibrary
(f) Analyze the nature and composition, and the classification
of goods according to tariff commodity classification and
heading number for customs and other related purposes,
which information shall be furnished the NEDA, DTI, DA, DOF,
DENR, and BSP;cralawlawlibrary
(g) Review the trade agreements for negotiation and trade
agreements entered into by the Philippines and make
recommendations, if necessary, on the consistency of the
terms of the agreements with the national policy
objectives;cralawlawlibrary
(h) Conduct public consultations and public hearings pursuant
to its functions; and
(i) Deputize or delegate, to appropriate government agency its
function of rendering rulings on disputes over tariff
classification of goods, until the plantilla positions necessary
for undertaking such function have been approved and filled-
up: Provided, That such delegation of function shall not extend
beyond three (3) years from the effectivity of this Act.
Sec. 1604. Reports of the Commission. –The Commission shall
place at the disposal of the President and any Member of the
Congress of the Philippines all information at its command. It
shall conduct such investigation and submit reports as may be
required by the President and the Congress of the Philippines.
It shall likewise report to the President and Congress on the
first Monday of December of each year and hereafter, a
statement of methods adopted and a summary of all reports
made during the year.
Sec. 1605. Access to Documents and Assistance to the
Commission. – The Commission or its duly authorized
representative shall have access to any document, paper or
record pertinent to the subject matter under investigation, in
the possession of any person, firm, copartnership, corporation,
or association engaged in the production, importation, or
distribution of goods under investigation, and shall have power
to summon witnesses, take testimony, administer oaths, and
to issue subpoena duces tecumrequiring the production of
books, papers, or documents relating to the matter under
investigation. The Commission may also request the views,
recommendations, and assistance of any government office,
agency, or instrumentality who shall be expected to cooperate
fully with the Commission.
Sec. 1606. Sworn and Verified Statements. – The Commission
may order the taking of sworn statements at any stage of any
proceeding or investigation before it. The sworn statements
must be made before a person duly authorized to administer
oaths.
The Commission is authorized to require any importer, grower,
producer, manufacturer or seller to file with the Commission a
statement, under oath, giving the selling prices in the
Philippines of goods imported, grown, produced, fabricated or
manufacture d by such person.
Sec. 1607. Implementing Rules and Regulations. – The
Commission shall promulgate and adopt such rules and
regulations as may be necessary to carry out the provisions of
this Act.
CHAPTER 2
FLEXIBLE TARIFF
Sec. 1608. Flexible Clause. – (a) In the interest of the general
welfare and national security, and, subject to the limitations
prescribed under this Act, the President, upon the
recommendation of the NEDA, is hereby empowered
to:ChanRoblesVirtualawlibrary
(1) Increase, reduce, or remove existing rates of import duty
including any necessary change in classification. The existing
rates may be increased or decreased to any level, in one or
several stages, but in no case shall the increased rate of
import duty be higher than a maximum of one hundred
percent (100%) ad valorem; (2) Establish import quotas or
ban imports of any commodity, as may be necessary; and
(3) Impose an additional duty on all imports not exceeding ten
percent (10%) ad valorem whenever
necessary: Provided, That upon periodic investigations by the
Commission and recommendation of the NEDA, the President
may cause a gradual reduction of rates of import duty granted
in Section 1611 of this Act, including those subsequently
granted pursuant to this section.
(b) Before any recommendation is submitted to the President
by the NEDA pursuant to the provisions of this section, except
47
in the imposition of an additional duty not exceeding ten
percent (10%) ad valorem,the Commission shall conduct an
investigation and shall hold public hearings wherein interested
parties shall be afforded reasonable opportunity to be present,
to produce evidence and to be heard. The Commission shall
also hear the views and recommendations of any government
office, agency, or instrumentality. The Commission shall
submit its findings and recommendations to the NEDA within
thirty (30) days after the termination of the public hearings.
(c) The power of the President to increase or decrease rates of
import duty within the limits fixed in subsection (a) hereof
shall include the authority to modify the form of duty. In
modifying the form of duty, the corresponding ad valorem or
specific equivalents of the duly with respect to imports from
the principal competing foreign country for the most recent
representative period shall be used as basis.
(d) Any order issued by the President pursuant to the
provisions of this section shall take effect thirty (30) days after
promulgation, except in the imposition of additional duty not
exceeding ten percent (10%) ad valorem which shall take
effect at the discretion of the President.
(e) The power delegated to the President as provided for in
this section shall be exercised only when Congress is not in
session.
(f) The power herein delegated may be withdrawn or
terminated by Congress through a joint resolution.
The NEDA shall promulgate rules and regulations necessary to
carry out the provisions of this section.
Sec. 1609. Promotion of Foreign Trade. – (a) For the purpose
of expanding foreign markets for Philippine products as a
means of assisting in the economic development of the
country, in overcoming domestic unemployment, in increasing
the purchasing power of the Philippine peso, and in
establishing and maintaining better relations between the
Philippines and other countries, the President, shall, from time
to time:ChanRoblesVirtualawlibrary
(1) Enter into trade agreements with foreign governments or
instrumentalities thereof; and
(2) Modify import duties, including any necessary change in
classification and other import restrictions as are required or
appropriate to carry out and promote foreign trade with other
countries: Provided, That in modifying import duties or fixing
import quota, the requirements prescribed in subsection (a) of
Section 1608 of this Act shall be observed: Provided,
however, That any modification in import duties and the fixing
of import quotas pursuant to the various trade agreements the
Philippines has entered into, shall not be subject to the
limitations of aforesaid subsection (a) of Section 1608.
(b) The duties and other import restrictions as modified in
subsection (a) of this section, shall apply to goods which are
the growth, produce, or manufacture of the specific country,
whether imported directly or indirectly, with which the
Philippines has entered into a trade agreement: Provided, That
the President may suspend the application of any concession
to goods which are the growth, produce, or manufactured
product of the specific country because of acts or policies
which tend to defeat the purposes set in this section, including
the operations of international cartels; and the duties and
other import restrictions as negotiated shall be in force and
effect from and after such time as specified in the order,
without prejudice to the Philippine commitments in any ratified
international agreement or treaty.

(c) Nothing in this section shall be construed to give any
authority to cancel or reduce in any manner the indebtedness
of any foreign country to the Philippines or any claim of the
Philippines against any foreign country.
(d) Before any trade agreement is concluded with any foreign
government or instrumentality thereof, reasonable public
notice of the intention to negotiate an agreement with such
government or instrumentality shall be given in order that
interested persons may have an opportunity to present their
views to the Commission. The Commission shall seek
information and advice from the DTI, DA, DOF, DENR, DFA and
BSP, and from such other sources as it may deem appropriate.
(e) In advising the President, on a trade agreement entered
into by the Philippines, the following shall be
observed:ChanRoblesVirtualawlibrary
(1) The Commission shall determine whether or not the
domestic industry has suffered or is being threatened with
injury and whether or not the wholesale prices at which the
domestic products are sold are reasonable, taking into account
the cost of raw materials, labor, overhead, a fair return on
investment, and the overall efficiency of the industry.
(2) The NEDA shall evaluate the report of the Commission and
submit recommendations to the President.
(3) Upon receipt of the report of the findings and
recommendations of the NEDA, the President may prescribe
adjustments in the rates of import duties, withdraw, modify or
suspend, in whole or in part, any concession under any trade
agreement, establish import quota, or institute such other
import restrictions, as the NEDA recommends to be necessary
in order to fully protect domestic industry and the consumers,
subject to
the condition that the wholesale prices of the domestic
products shall be reduced to, or maintained at, the level
recommended by the NEDA unless, for good cause shown, an
increase thereof, as recommended by the NEDA is authorized
by the President. Should increases be made without such
authority, the NEDA shall immediately notify the President who
shall allow the importation of competing-products in such
quantities as to protect the public from the unauthorized
increase in wholesale prices.
(f) This section shall not prevent the effectivity of any
executive agreement or any future preferential trade
agreement with any foreign country.
(g) The NEDA and the Commission shall promulgate such
reasonable procedures, rules and regulations as they may
deem necessary to execute their respective functions under
this section.
CHAPTER 3
TARIFF NOMENCLATURE AND RATE OF DUTY
Sec. 1610. General Rules for the Interpretation (GRI). –The
classification of goods and its tariff nomenclature as provided
pursuant to this Act shall be governed by the following
principles:ChanRoblesVirtualawlibrary
(1) The titles of sections, chapters and subchapters are
provided for easy reference only. For legal purposes,
classification shall be determined according to the terms of the
headings and any relative section or chapter notes and,
48
provided such headings or notes do not otherwise require,
according to the following1
provisions:ChanRoblesVirtualawlibrary
(2)(a) Any reference in a heading to the goods shall be taken
to include a reference to the same in their incomplete or
unfinished form or state: Provided, That the incomplete or
unfinished goods have the essential character, as presented, of
the complete or finished goods. It shall also be taken to
include a reference to the same, in their complete or finished
form or state (or falling- to be classified as complete or
finished by virtue of this Rule), presented unassembled or
disassembled.
(b) Any reference in a heading to a material or substance shall
be taken to include a reference to mixtures or combinations of
that material or substance with other materials or substances.
Any reference to goods of a given material or substance shall
be taken to include a reference to goods consisting wholly or
partly of such material or substance. The classification of
goods consisting of more than one material or substance shall
be according to the principles of Rule 3.
(3) When by application of Rule 2(b) or for any other reason,
goods are, prima facie, classifiable under two (2) or more
headings, classification shall be effected as
follows:ChanRoblesVirtualawlibrary
(a) The heading which provides the most specific description
shall be preferred to headings providing a more general
description. However, when two (2) or more headings each
refer to part only of the materials or substances contained in
mixed or composite goods or to part only of the items in a set
put up for retail sale, those headings are to be regarded as
equally specific in relation to those goods, even if one of them
gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials
or made up of different components, and goods put up in sets
for retail sale, which cannot be classified by reference to 3(a),
shall be classified as if they consisted of their essential
character, insofar as this criterion is applicable.
(c) When goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which occurs
last in numerical order among those which equally merit
consideration;cralawlawlibrary
(4) Goods which cannot be classified in accordance with the
above Rules shall be classified under the heading appropriate
to the goods to which they are most akin.
(5) In addition to the foregoing provisions, the following Rules
shall apply with respect to the goods referred to
therein:ChanRoblesVirtualawlibrary
(a) Camera cases, musical instrument cases, gun cases,
drawing instrument cases, necklace cases and similar
containers, specially shaped or fitted to contain specific goods
or set of goods, suitable for long-term use and presented with
the goods for which they are intended, shall be classified with
such goods when of a kind normally sold therewith. The Rule
does not, however, apply to containers which give the whole
its essential character; and
(b) Subject to the provisions of Rule 5(a), packing materials
and packing containers presented with the goods therein shall
be classified with the goods if they are of a kind normally used
for packing such goods. However, this provision does not apply
when such packing materials or packing containers are clearly
suitable for repetitive use.

(6) For legal purposes, the classification of goods in the
subheadings of a heading shall be determined according to the
terms of those subheadings and any related subheading notes
and, mutatis mutandis, to the above Rules, on the
understanding that only subheadings at the same level are
comparable. For the purposes of the Rule, the relative section
and Chapter Notes also apply, unless the context otherwise
requires.
Sec. 1611. Tariff Nomenclature and Rates of Impart Duty. –
The provisions of Section 104 on Rates of Import Duty of
Presidential Decree No. 1464, otherwise known as the Tariff
and Customs Code of the Philippines of 1978, as amended,
specifically providing for the tariff sections, chapters, headings
and subheadings and the rates of import duty, shall still apply
and shall supplement this Act. There shall be levied, collected
and paid upon all imported goods the rates of duty indicated
thereon except as otherwise specifically provided for in this
Act: Provided, That the maximum rate shall not exceed one
hundred percent (100%) ad valorem.
The rates of duty provided or subsequently fixed pursuant to
Sections 1608 and 1609 of this Act shall be subject to periodic
investigation by the Tariff Commission and may be revised by
the President, upon the recommendation of the NEDA.
It shall also apply to all products, whether imported directly or
indirectly, of all foreign countries, which do not discriminate
against Philippine export products. An additional one hundred
percent (100%) across-the-board duty shall be levied on the
products of any foreign country which discriminates against
Philippine export products.
Sec. 1612. Tariff Nomenclature and Rates of Export Duty. –
The provisions of Section 514 on Export Products Subject to
Duty and Rates of Presidential Decree No. 1464, otherwise
known as the Tariff and Customs Code of 1978, as amended,
specifically providing for the export products subject to duty
and rates, shall still apply and shall supplement this Act.
TITLE XVII
CONGRESSIONAL OVERSIGHT COMMITTEE
Sec. 1700. Congressional Oversight Committee. – The
Congressional Customs and Tariff Oversight Committee, herein
referred to as the Committee, is hereby constituted in
accordance with the provisions of this Act. The Committee shall
be composed of the Chairpersons of the Committee on Ways
and Means of the Senate and House of Representatives and
four (4) additional members from each House, to be
designated by the Senate President and the Speaker of the
House of Representatives, respectively. The Committee shall,
among others, in aid of legislation:ChanRoblesVirtualawlibrary
(a) Monitor and ensure the proper implementation of this
Act;cralawlawlibrary
(b) Review the collection performance of the Bureau; and
(c) Review the implementation of the programs of the Bureau.
In furtherance of the hereinabove cited objectives, the
Committee shall require the Bureau to submit all pertinent
information which includes:ChanRoblesVirtualawlibrary
(1) Industry audits;cralawlawlibrary
(2) Collection performance data; and
(3) Status report on administrative, civil and criminal actions
49
initiated against persons.
TITLE XVIII
FINAL PROVISIONS
Sec. 1800. Implementing Rules and Regulations. – The
Secretary of Finance shall, upon the recommendation of the
Commissioner, promulgate the necessary rules and regulations
for the effective implementation of this Act.
Sec. 1801. Transitory Provisions. – All suits, proceedings, or
prosecutions whether civil or criminal, for causes arising or
acts done or committed prior to the effectivity of this Act, shall
be commenced and prosecuted within the same time in the
same manner and with the same effect as if this Act had not
been enacted and all rights acquired, offenses committed, and
penalties or forfeitures or liabilities waived prior to the said
effectivity shall not be affected thereby.
SEC 1802. Saving Clause. – All other laws, acts, executive
orders, and Customs Administrative Orders (CAOs), Customs
Memorandum Orders (CMOs), orders, memoranda, circulars,
rules and regulations issued by the Bureau, under the
provisions of Presidential Decree No. 1464, otherwise known
as the Tariff and Customs Code of the Philippines of 1978, as
amended, not inconsistent with the provisions of this Act, shall
remain valid unless the same will be repealed or amended
accordingly, pursuant to the provisions of this Act.
Sec. 1803. Repealing Clause. – Presidential Decree No. 1464,
otherwise known as the Tariff and Customs Code of the
Philippines of 19785 as amended, and Presidential Decree No.
1853 which require any applicant for letter of credit covering
imports to deposit the full amount of duties due on the
importation, are hereby expressly repealed. All other laws,
acts, presidential decrees, executive orders, rules and
regulations or parts thereof inconsistent with the provisions of
this Act are hereby expressly repealed, amended or modified
accordingly.
Sec. 1804. Separability Clause. – If any provision of this Act is
declared invalid or unconstitutional, the remaining provisions
or parts shall remain in full force and effect.
Sec. 1805. Effectivity. – This Act shall take effect fifteen (15)
days after its publication in the Official Gazette or in a
newspaper of general circulation.